The country’s largest fuel retailer is one step closer to coming under Australian ownership.
Z Energy shareholders have overwhelmingly backed a deal to sell the business to Australian fuel company, Ampol, for close to $2 billion.
The final voting results were 98.7 percent in favour and 1.27 percent against.
Z Energy chair Abbey Foote said the board was unanimously supported Ampol’s offer and it was pleasing to see such a high level of support from shareholders.
“We now look forward to obtaining consent from the Overseas Investment Office as soon as possible and concluding the Scheme with Ampol.”
The deal will also require sign-off from the High Court.
The Commerce Commission gave Ampol clearance to buy Z Energy last week, saying it was contingent on Ampol selling its existing New Zealand fuel operation, Gull Petroleum.
Ampol had found a buyer in Australian investment firm Allegro Funds, but the competition regulator said it was yet to approve the sale.
While this morning’s special meeting highlighted strong support from shareholders, the company’s board fielded several pointed questions from investors who were concerned the offer, at $3.76 per share, undervalued the company.
It is at the lower end of the independent valuation Calibre Partners provided, which judged the company to be worth between $3.54 and $4.07 per share, with a midpoint of $3.80.
The company’s chair, Abbey Foote, responded saying the deal represents fair value in what is an increasingly challenging sector marked by increased competition, declining margins, the rise of electric vehicles and regulatory risk.
“The decline in the social acceptance of fossil fuels has not gone unnoticed in global capital markets with the rise in ESG (environmental, social, governance) investment mandates from institutional shareholders being more mainstream,” Foote said.
“It is the board’s view, reinforced by feedback from Z investors, that access to capital for fossil fuel businesses will become increasingly difficult and more expensive, while the demand for potentially considerable capital expenditure to manage the energy transition to a low carbon future will put greater strain on Z’s balance sheet.”
She also said any valuation needed to make assumptions about risk events, as was currently highlighted by the war in Ukraine which had sent crude oil prices soaring to near record highs, placing pressure on fuel supply and margins.
Z Energy chief executive Mike Bennetts took questions regarding the company’s outlook versus a year ago when the takeover offer was made.
He replied that the company’s view was more “bearish” than it was a year ago because its retail margins and volumes tend to get compressed during times of high commodity prices.
“Beyond that, I can’t help but observe that certainly business and consumer confidence is very, very low.”
*This article belongs to RNZ