The acquisition of Esso (Thailand) is drawing closer to completion as Bangchak Corp is expecting the Trade Competition Commission of Thailand (TCCT) to give a green light by this Wednesday.
Earlier this year, Bangchak Corporation Public Company Limited (SET: BCP) announced the acquisition of shareholding in Esso (Thailand) Public Company Limited (SET: ESSO) and continued to make a tender offer for all shareholding in its rival business.
Mr. Chaiwat Kovavisarach, Bangchak Group Chief Executive Officer and President, said that he expected TCCT to approve the acquisition soon, and the progress is expected to be faster as it does not require the new government to complete the process.
BCP sets a tender offer price for ESSO at THB9.94 per share, based on the financial status of ESSO in the first quarter of 2023, which gives nearly a 9% upside from the current trading price in the market of THB9.15 per share.
The CEO is expecting to complete the deal with ExxonMobil, the major shareholder of ESSO, by the fourth quarter of this year. After the payment is complete, the company will be able to immediately book ESSO’s revenue and earnings to its balance sheet. The merger will come afterward.
“Bangchak is confident that the deal will contribute an immediate 2,000 million baht in revenue to the company,” said Kovavisarach. “There will be a total of 2,100 gas stations, making it the second largest in sales”.
Pi Securities (PI) has a positive view on the acquisition, expecting an acceleration of EPS around 60% from the deal, which could give an upside of THB 5-8 per share to BCP. However, PI has yet to include this addition to its forecast and prefers the deal to complete first while giving a target price at THB42.00 per share, which is higher than Refinitiv consensus of THB40.99 per share.