24 Sep 2015

Z Energy reaps benefits of takeover

8:59 am on 24 September 2015

Z Energy shares are close to all time highs, after the fuel retailer said yesterday it expected its takeover of Chevron's Caltex business would lift earnings by more than it thought, while costs would be lower.

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Photo: RNZ

The company revised the projected benefits of the deal from $15-$20 millon to $25-$30m, while the costs were estimated to be $9m less.

The takeover plan is currently with the Commerce Commission which is weighing up the impact it would have on market competition. A decision is expected just before Christmas.

Forsyth Barr analyst Andrew Harvey-Green said the deal was likely to the green light but Z Energy would have to make concessions.

"There may be some retail areas where there are a number of petrol stations in very close proximity with each other, and they may have to divest either its station, or the Caltex station, in particular sites."

Mr Harvey-Green has raised the rating on Z Energy to outperform.

Z Energy's stock closed at $6.31 yesterday.

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