Suncor Energy (NYSE:SU) could generate C$9.6 billion of C$11.2 billion in pre-tax cash revenue and C$7.7 billion in after-tax cash revenue for its gas station network, Manav said on Monday. Gupta, Credit Suisse analyst.
Suncor (SU) has entered into an agreement with Elliott Management appoint three new independent directors to the energy company’s board; and conduct a strategic review of its downstream retail business.
“We see a possibility that, like Marathon Petroleum, Suncor will eventually sell its retail business,” Gupta wrote. “We believe the primary use of the proceeds could be to support higher returns for shareholders, as was the case with proceeds from the sale of Marathon’s Speedway.”
Like Suncor (SU), Marathon has faced pressure from activist investor Elliott Management, which has called for improved performance and the sale of its retail business before selling its gas station business. to Seven & i Holdings for $21 billion in 2020.
Circle K chain owner Alimentation Couche-Tard (OTCPK:ANCUF)(OTCPK:ANCTF) is considered a potential bidder for Suncor’s (SU) more than 1,500 Petro-Canada stations, though a deal would likely come with significant antitrust hurdles.
If Couche-Tard wanted to buy the company, it might have to divest half of the gas stations due to antitrust concerns, said Stifel GMP analyst Martin Landry.
Criticizing operational and security issues that have plagued the company in recent years, Elliott disclosed a 3.4% stake in Suncor in April.