Marathon Petroleum's Speedway Gets Interest From PE Firm, 7-Eleven Parent

Marathon Petroleum's Speedway gas stations have drawn takeover inquiries from 7-Eleven's parent and a major private-equity firm, a media report says. A deal could be valued at more than $20 billion.
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Marathon Petroleum (MPC) - Get Report shares rose after a media report said its Speedway gas-station unit has drawn takeover interest from a number of firms.

In particular, people familiar with the matter told Bloomberg, the interested parties include Seven & I Holdings, the Japanese parent of convenience-store chain 7-Eleven, and the London private-equity firm TDR Capital.

The people familiar said Speedway, which has 4,000 stores, may go for more than $20 billion.

TDR would consider combining Speedway with one of its portfolio companies, U.K. gas-station operator EG Group, one of Bloomberg’s sources said. That deal could total $26 billion. The transaction would use what’s known as a reverse Morris trust to keep taxes down.

Bloomberg’s sources said other potential bidders have shown interest in Speedway, too, but there's no guarantee of a deal with anyone.

Marathon Petroleum’s stock has sagged 31% since Oct. 1, 2018. That decline stemmed from trouble in the refining industry and concern about the debt Marathon incurred from its $23 billion purchase of fellow refiner Andeavor in 2018.

Last year, Marathon opted to split up, under pressure from activist investors such as Elliott Management and D.E. Shaw. In addition, CEO Gary Heminger said he would exit.

Marathon still could decide to spin off rather than sell Speedway. In October, Marathon Petroleum said it would do just that - in a tax-free distribution to shareholders - sometime this year.

Marathon officials weren’t immediately available for comment.

As last check, Marathon shares traded at $58.18, up 2.5%. 

Morningstar analyst Allen Good pegs the fair value of Marathon shares at $89.

“We continue to like Marathon for its diversified mix of businesses, earnings-growth potential from synergies and investment, clear capital-return strategy and favorable macro backdrop,” he wrote in a report Jan. 30.