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EG Group in Talks to Team Up With Macquarie for Caltex Bid

Harry Brumpton and Dinesh Nair

(Bloomberg) -- The U.K.’s EG Group is in talks to team up with Macquarie Group Ltd. in its attempt to acquire Caltex Australia Ltd., people familiar with the matter said.

EG Group is in discussions with an arm of Macquarie to partner on the potential deal, according to the people, who asked not to be identified because the information is private. If their bid is successful, EG Group would keep Caltex’s main retail business, while Macquarie would take on its refinery unit and some infrastructure assets, the people said.

Caltex shares rose as much as 1.1% on Wednesday in Sydney, giving it a market value of about A$8.3 billion ($5.6 billion). EG Group, which is one of the world’s largest independent gas station and convenience store chains, has been working with financial advisers as it evaluates making an offer for the company, the people said.

Bringing in a partner could help boost EG Group’s chances as it competes with Canadian convenience giant Alimentation Couche-Tard Inc., which offered to take over Caltex for A$8.6 billion last year. While Caltex rejected the bid, Couche-Tard was given access to select non-public information to entice it to sweeten its offer.

No firm agreements have been reached, and EG Group could opt to team up with another partner, the people said. Representatives for Caltex, EG Group and Macquarie declined to comment.

EG Group, which is controlled by British billionaire brothers Mohsin and Zuber Issa, has expanded rapidly through acquisitions over the past few years. It’s turned into a global giant with about 5,000 fuel station and convenience store sites across Europe, North America and Australia, according to its website.

For Caltex Australia, fuels and infrastructure business accounted for about 65% of its earnings before interest and tax in 2018, according to its annual report. The remainder came from its convenience retail business.

(Updates Caltex Australia’s response in fifth paragraph.)

--With assistance from Gillian Tan.

To contact the reporters on this story: Harry Brumpton in Sydney at hbrumpton@bloomberg.net;Dinesh Nair in London at dnair5@bloomberg.net

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net;Fion Li at fli59@bloomberg.net

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