Ampol Limited (ASX:ALD) submitted a non-binding indicative proposal to acquire Z Energy Limited (NZSE:ZEL) for approximately NZD 2 billion on June 2, 2021. Under the terms of transaction, Ampol made a proposal to acquire all share of Z Energy at an offer price of NZD 3.78 per share. The proposal would be implemented by way of a scheme of arrangement, a court supervised process under which a meeting of shareholders would be held to vote on the transaction. On October 10, 2021, Ampol Limited entered into scheme implementation agreement to acquire Z Energy Limited for NZD 1.9 billion. In addition to the offer price, Ampol's Proposal includes a dividend adjustment mechanism which permits Z Energy to pay a dividend equal to NZD 0.00055 per share per calendar day, for each day that the transaction extends beyond March 31, 2022, up to a limit of NZD 0.1 per share. Subject to further discussions with Z Energy, Ampol is also willing to consider an amendment to the current proposal to include partial Ampol share consideration. Ampol's proposal follows a period of private discussions which included an initial non-binding indicative proposal of NZD 3.35 per share being submitted on June 2, 2021, with a subsequent proposal of NZD 3.50 per share submitted on July 1, 2021. Ampol intends to fund the acquisition in accordance with its capital allocation framework, which would include new debt facilities, proceeds from any divestments, and an equity issuance in the order of AUD 600 million (NZD 627.612 million). The equity issuance could be in the form of partial share consideration to Z Energy shareholders or Ampol conducting a pro rata entitlement offer to its own shareholders, which would be done following regulatory approval and nearer the date of completion. Ampol has secured new debt facilities of NZD 1.8 billion that will, along with existing facilities, enable the Scheme to be fully funded. The Z Energy Board has stated that it is in its shareholders' best interests to grant Ampol a four-week period of exclusivity for it to undertake confirmatory due diligence enquiries and to agree terms on a Scheme Implementation Agreement. As of September 27, 2021, Z Energy has given Ampol another two weeks of exclusive access to its books to try to thrash out the details of a possible takeover offer. Each party is liable to pay NZD 20 million of break fee to other party in case of transaction is termination and NZD 20 million payable by Ampol is regulatory consents not achieved. The Z Board has declared a NZD 0.07 per share first half FY22 dividend meaning the final cash consideration will be reduced by the excess NZD 0.02 per share to NZD 3.76 per share. Commerce Commission agreed with Ampol an extension of time until March 16, 2022 in which to make a decision. As of March 16, 2022, Commerce Commission has approved the transaction. On March 16, 2022 the New Zealand Commerce Commission (NZCC) provided clearance for Ampol to acquire Z Energy Limited. The NZCC clearance is subject to an undertaking given by Ampol to fully divest its Gull business in New Zealand (Gull) within nine months of completing the Z Energy transaction. Ampol's acquisition of Z Energy is still subject to Ampol obtaining Overseas Investment Office (OIO) approval, and the Z Energy shareholder vote, the latter to be determined on March 25, 2022. Under the clearance provided by the NZCC, Ampol has nine months from the date of completion of the Z Energy transaction to divest Gull.

The transaction is subject to customary closing conditions, including agreeing the binding transaction documentation, Board approval by both Z and Ampol, Z shareholder approval, High Court approval, approval by both the New Zealand Commerce Commission and the New Zealand Overseas Investment Office, due diligence, and other required regulatory approvals. As part of the New Zealand Commerce Act clearance process, Ampol intends committing to a material divestment to ensure any potential competition law issues are fully addressed because of transaction. The transaction would be conditional on obtaining clearance, which would be based on the divestment undertaking (to be agreed with the New Zealand Commerce Commission). It is expected that divestments would occur within a prescribed period following completion of the transaction. Ampol is willing to work with Z Energy and relevant regulatory authorities, including Overseas Investment Office, and is confident in its ability to receive required approvals. On October 11, 2021, the Board of Directors of Z Energy Limited has unanimously recommended the approval for the transaction. On receipt of Ampol's original proposal the Z Board formed a subcommittee to manage the process and retained. Under the terms of the Scheme Implementation Agreement with Ampol, Z is required to ensure that all of the Forfeited Plan Shares currently held by the Trustee are transferred to Z and cancelled for no net monetary consideration for the period between March 10 to march 31, 2022. Shareholders in Z Energy Limited have voted in favor of the Scheme of Arrangement. As of March 31, 2022, the takeovers panel has provided Z Energy with a ‘no objection' statement with respect to the scheme of arrangement, the scheme remains subject to approval from the Overseas Investment Office and final orders of the High Court, expected to be obtained by mid-April 2022. As of April 11, 2022, due to the requirement for Ampol to give sufficient notice of implementation of the Scheme to the New Zealand Commerce Commission (“NZCC”) in accordance with the conditions of the NZCC's clearance of the Scheme, the application for Final Court Orders approving the Scheme has been rescheduled and will now be considered before the presiding judge of the High Court in Wellington on April 26, 2022. Following the court approval, Z Energy Limited will suspended its quotation on stock exchange on closure of April 28, 2022. As of April 26, 2022, High Court has approved the transaction. Completion is expected during first half of 2022. As pf April 26, 2022, Transaction is expected to close on May 10, 2022.

Goldman Sachs as financial adviser and Chapman Tripp as external legal counsel. Tony Damian of Herbert Smith Freehills and Bell Gully acted as a legal advisor to Ampol Limited. Macquarie Group Limited (ASX:MQG) acted as financial advisor to Ampol.

Ampol Limited (ASX:ALD) completed the acquisition of Z Energy Limited (NZSE:ZEL) on May 10, 2022. The existing directors of Z have resigned effective today and, Ampol NZ has appointed a new Board for Z effective today Matthew Halliday, Managing Director and CEO, Ampol Limited, Penelope Winn, Independent, Non-executive Director, Ampol Limited; and Gregory Barnes, Group Chief Financial Officer, Ampol Limited.