WOW should forget about Aldi, if poor people want poor value low price groceries let them eat and drink elsewhere. Coles has been out of Goyder's focus as WES since Homebase UK and Bunnings' being impacted by Masters cutting prices. Coles is of low relevance to WOW as Coles has always been there, is a little higher priced and has a different service offering IMHO see below for materials more material:
Banducci has more things to worry about IMHO like the WOW sale to Caltex. http://www.copyright link/street-ta...woolworths-petrol-stations-cs-20161026-gsbomy BP should woo Caltex not Woolworths' petrol stations: CS
It is more compelling for oil giant BP to make a tilt for Caltex Australia rather than buying Woolworths' petrol business, according to Credit Suisse.
In a report titled: Hello...is it me you're looking for? Credit Suisse analyst Mark Samter tells clients that if BP is seeking to bulk up in Australia is should look at Caltex over Woolworths' petrol stations.
"If BP really is serious about growing Australian downstream, and are willing to pay the mooted multiples, then perhaps they are looking at the wrong target?
"Caltex could be all they ever wanted, albeit their arms might not be open wide (yep, we are channeling Lionel Ritchie)."
Samter outlines that it would be a bigger outlay for BP but he questions whether the oil major will emerge as the ultimate buyer of Woolworths' petrol business.
"We are reticent to put too much faith in any numbers around BP's bid for Woolworths sites. However, optically they may pay >9x EV/EBITDA (this assuming ~$180m EBITDA, a wide variance exists) for 500 lower quality, leasehold sites," he said.
"On the infrastructure side, Buckeye Partners just paid ~11x EV/EBITDA for a 50 per cent stake in VTTI, which owns 13 terminals in 5 continents (none as good a market structure as Australia)."
Woolworths has Morgan Stanley managing a sale of its petrol unit.
BP and Vitol - both self-advised in the auction - and Caltex Australia, which has investment bank UBS in its corner.
Over at Citi, analysts have upgraded Caltex to a "buy" rating with a target price of $34.44.
Citi says Caltex has underperformed by about 15 per cent since it reported earnings, largely because of risks around losing the Woolworths supply agreement.
"We think the stock more than reflects these lost earnings. The investment risk is timing around WOW fuels newsflow, with deal finalisation expected by end of calendar 2016, before CTX delivers earnings growth through calendar 2017," Citi notes.
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