- 27 Mar
Valero at final stages of spinning off retail business
According to a San Antonio news source, Valero has one hurdle remaining before they can spin off the convenience store side of its business into its own entity.
The point of the spinoff is to give Valero share holders more value, as investors and financial analysts recognize the value of the retail operation on its own, beyond the refinery business. Other similar retailers have a trade valuation of $2 billion, according to Valero CFO Mike Ciskowski, so this spinoff would add $2 billion to Valero shareholder value.
But the IRS has yet to issue a private letter ruling, confirming that shares in the new company can be treated as a tax-free distribution to shareholders. Ciskowski isn’t alarmed, and expects the letter is likely to come in the next month or so, since Valero is in month five of a typical six month process.
The new company will be called CST Brands Inc., taken from the Valero brand “Corner Store”. The company will operate 1900 sites in the US and Canada, and will be publicly traded on the NYSE.
Roughly 1030 of those Corner Stores are in the US and use PriceAdvantage to manage the entire fuel price management cycle. The close customer partnership with Valero allowed the PriceAdvantage team to deliver industry leading analytics and optimization features to the product over the course of the last 15 months.