Will Speedway be spun off?

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Will Speedway be spun off?

10/30/2019
Speedway offers several products under its Speedy Choice private brand.

Changes could be coming to Findlay, Ohio-based Marathon Petroleum Corp. (MPC) and convenience story chain Speedway LLC, which offers several private label products under its Speedy Choice brand as well as an array of fresh grab-and-go products.

One month after a shareholder group called for the company to split into three companies, MPC is reportedly ready to spin off its retail network and make some executive moves.MPC's retail arm is Enon-based Speedway LLC. Similar calls for a Speedway spinoff came at the end of the 2016, and after a nine-month review, MPC decided against the move.

Citing people familiar with the discussions, The Wall Street Journal reported MPC's board of directors is talking changes, which include a retail spinoff and potentially replacing Chairman and CEO Gary Heminger. Other executives could also be replaced.

The situation is fluid, and the company may still end up reversing course on some or all of the moves, the report added.

MPC is scheduled to release its third-quarter financial results on Oct. 31, followed by a conference call on the results.

The possible spinoff follows a Sept. 25 call by Elliot Management Corp. for the MPC board to "create three strong, independent companies — each a leader in its sector."

According to Elliot Management, the companies would break out as followed:

  1. RetailCo would become standalone Speedway, which upon separation would be the largest U.S.-listed convenience store operator;
  2. MidstreamCo would become standalone MPLX, which upon separation would be a top-five U.S. midstream operator by enterprise value; and
  3. RefiningCo would become New Marathon, which following the transactions, would be the largest independent merchant refiner by U.S. throughput.

At the time, MPC said it would "thoroughly evaluate Elliott's proposal and look forward to continuing our constructive engagement around these issues."

MPC became an independent company is 2011. In 2014, Speedway doubled its footprint with the acquisition of the Hess Corp.'s retail network. It grew again last year when MPC completed a strategic tie up with Andeavor, creating a national retail powerhouse.

 

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