- 20 Sep
Will the Valero spinoff have the same success as Susser’s?
Both Valero and Susser have decided to go through a spinoff of part of their business, each with the same goal in mind.
Sam Susser, the CEO of Susser Holdings Corp. said in an earnings call last month that the value of the wholesale division has not been fully recognized, and the intention was to spin it off as a separate division.
Valero in their September 2012 investor presentation said their board had authorized management to pursue a separation of their retail business because investors and analysts have ignored the higher potential value of their retail segment, and to unlock value to their shareholders. This was the same earnings announcement when Valero’s retail segment achieved their highest quarter operating income on record. On a side note, Valero is using PriceAdvantage as their fuel price management solution at all of their company stores.
On September 20, Susser took their spun off wholesale division public at $20 per share, trading as SUSP on the New York Stock Exchange, and as of September 24, the stock is holding steady at $23/share. That successful IPO generated $195 million for the company.
That’s an interesting benchmark to use as we watch Valero’s move to increase their shareholder value as well. Reuters sources reported the retail business spinoff could generate $3.5 billion to Valero.