- 08 Oct
Investment management company urges Murphy to spin off retail fuel business
In their third quarter 2012 investor news letter, hedge fund manager Third Point, LLC urged Murphy Oil to spin off their retail fuel business. In the letter, Third Point says spinning off the retail fuel business would result in a share price increase of about 60%.
In the letter, Third Point used Alimentation Couche-Tard, Casey’s General Stores, and Susser Holdings as a reference to suggest the Murphy 1100 store retail fuel business would be worth $2.3 billion to $2.8 billion if it were a standalone public company.
This makes for an interesting comparison to the recent Valero announcement of a pending course of action for their retail fuel business, including a possible spin off. Valero has a 1027 store network comparable in size to Murphy. Reuters and others have estimated the value of a Valero spin off to be $3.5 billion. There have been some reports that Valero is looking to sell their retail units, but Valero sees < ahref="https://www.priceadvantage.com/blog/2012/10/01/297-fuel-price-management-blog-valero-sees-advantages-to-spinning-off-their-retail-fuel-division-" target="_blank">advantages to a spin off vs. a sale.
The Third Point letter may be found here.