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French bulk storage operator Rubis has confirmed that it has made an "irrevocable offer" to the joint shareholders of Société Réunionnaise de Produits Pétroliers (SRPP) - oil majors Shell and Total - to purchase the entire share capital of the company.

In reply to the offer, Shell and Total are said to have accepted to open an exclusive period of negotiation.

SRPP markets fuels, liquefied petroleum gas (LPG) and lubricants on Reunion Island. With a retail network of 51 petrol stations, it is the local market leader.

SRPP also owns and operates the main storage facility and other logistics used to supply the island. In 2014, its turnover was 250 million euros.

A new decree issued in February 2014, setting local prices and margins for the petroleum industry, will allow SRPP to generate a normative earnings before interest, tax, depreciation, and amortization (EBITDA) of around 22 million euros.

The Rubis offer will trigger the consultation of employee representatives of SRPP with the selling shareholders and, if accepted, completion of the transaction would be subject to a review by the French Competition Authority (l'Autorité de la concurrence).

Rubis is one of the leading European companies specialized in the distribution and storage of petroleum products, chemicals, agro products and fertilizers. It has storage terminals in Rotterdam, Antwerp and Ceyhan.

According to the company's website, petroleum products (gasoline, diesel, home heating oil) represent almost 70 percent of its business with the remaining 30 percent divided among chemical products, foodstuffs (oils, molasses) and liquid fertilisers.

Through this projected debt-financed acquisition, Rubis would expand its presence in the Indian Ocean and also extend its portfolio to fuel distribution.