Caltex Australia has received a non-binding proposal from EG Group, offering $3.9bn in cash and securities to be issued in Ampol, which will operate the Caltex fuel and infrastructure business.

Morgan Stanley calculates the offer could represent anywhere from $29.32 a share and up to $39.77, depending on the multiples assumed. Refining is difficult to value as the refinery made no profit in January 2020 on the broker's estimates.

Target is $34. Industry view is In-Line. Equal-weight.

Sector: Energy.

Target price is $34.00.Current Price is $34.77. Difference: ($0.77) - (brackets indicate current price is over target). If CTX meets the Morgan Stanley target it will return approximately -2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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