Shares of Marathon Petroleum (MPC) - Get Report fell Thursday, after reports that Seven & i Holdings, the Japanese company that controls 7-Eleven, dropped its effort to buy Marathon’s Speedway gas stations.
The Nikkei reported that news early Thursday.
Seven & I wasn’t interested in paying what Marathon wanted for the Speedway unit, which has 400 stores, knowledgeable sources told Bloomberg. The news service had reported Feb. 20 that the Japanese company was in exclusive negotiations for the purchase and that it was working on financing, possibly for a $22 billion deal.
But S&P Global Ratings said last week that such a large acquisition might lead it to downgrade Seven & i’s credit rating, because it would cause a "substantial deterioration" in the company’s financial standing.
Private-equity firm TDR Capital also has expressed interest in Speedway, Bloomberg reported last month. TDR could blend Speedway with another of its portfolio companies, U.K. gas-station operator EG Group.
Marathon Petroleum’s stock has sagged over the past 17 months, dropping 44% since Oct. 1, 2018. That decline stemmed from trouble in the refining industry as a whole and concern about the debt Marathon incurred from its $23 billion purchase of fellow refiner Andeavor in 2018.
Last year, Marathon Petroleum 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.
It’s still possible that Marathon Petroleum will decide to spin off rather than sell Speedway. In October, the company said it would do just that.
At last check, Marathon Petroleum shares traded at $43.25, down 5.67%.