EG Group makes $25m takeover bid for Oliver's Real Food

EG Group makes $25m takeover bid for Oliver's Real Food

A British company that attempted to buy Caltex Australia (ASX: CTX) now has its eye on roadside convenience restaurant chain Oliver's Real Food (ASX: OLI).

EG Group's $25 million offer for Oliver's is pocket change compared to the $3.9 billion takeover bid that was rejected by Caltex earlier this month, but it represents an almost 54 per cent premium on yesterday's closing price for OLI shares.

Oliver's has been on the recovery path since the return of its CEO Jason Gunn 12 months ago, lifting its bottom line by $10 million year-on-year in the first half of FY20. The result would have likely been better still if it weren't for lower traffic due to summer bushfires.

EG Group, which entered the Australian petrol retail market in 2018 with the purchase of 540 fuel convenience sites from Woolworths Group (ASX: WOW) for $1.73 billion, has made a non-binding, conditional and incomplete proposal for all OLI shares at 10 cents each.

Oliver's is currently in advanced discussions with EG, which was founded by brothers Mohsin and Zuber Issa and also operates fuel stations and fast food outlets in Europe and the US.

"After careful assessment, the Board of Oliver's has determined that engaging further with EG Group is in the best interests of shareholders," the company said today.

"The proposal is subject to conditions including, but not limited to mutually agreeable transaction documents, court and shareholder approvals, regulatory approvals, unanimous support of the Oliver's board, a call option over 19.9% of the Company's at the Proposal value and other customary deal protection mechanisms."

Oliver's chairman Nick Downer emphasises the discussions are ongoing, and as such there can be no assurance that the proposal will result in any formal offer to shareholders.

Shares were up almost 28 per cent at 8.3 cents each at 2pm AEDT.

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