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Delek U.S. Bolsters Leadership to Help Counter Investor Pressure

Company names chief commercial officer, offers further response to shareholder’s push to sell c-stores
delek us holdings

BRENTWOOD, Tenn. — Delek U.S. Holdings Inc. has appointed Todd O'Malley to the position of executive vice president and chief commercial officer to help execute the company’s value-creation strategy as it faces pressure from an activist investor to divest its convenience stores.

The appointment comes as majority shareholder CVR Energy Inc., New York, controlled by entrepreneur Carl Icahn, has suggested that Delek U.S.’s stock is undervalued and that it could benefit from selling the retail network, among other measures. CVR has nominated three independent directors to the Delek U.S. board and continues to push its agenda.

“Delek U.S. encourages input and engagement from all investors and looks forward to an ongoing dialogue with all shareholders, including CVR, as the company continues to execute value creation strategies,” Uzi Yemin, chairman, president and CEO, said in a letter responding to CVR Energy.

In response to an additional request by CVR Energy to view documents that are not public, Delek U.S. said, “CVR has launched its activism campaign and proxy fight to drive its agenda, which we believe is not in the best interests of Delek shareholders. Indeed, CVR's previous letter demanded that Delek take a number of actions that would benefit CVR, to the detriment of Delek and its shareholders. The successful execution of Delek's long-term strategy has clearly delivered value for our shareholders.”

O’Malley’s expertise includes “a wealth of private equity, trading, capital markets, operations and management expertise in the energy and renewable sectors,” said Yemin. “This aligns our company for future growth with strong proven leadership."

Further, O'Malley served previously as a special advisor to a number of private equity and public company CEOs and boards regarding corporate strategy, mergers and acquisitions, divestments, financial structuring and commercial optimization. And he has had leadership roles at several energy companies, including as president and CEO of Citizens Cos., Boston; executive vice president and chief commercial officer at Gulf Oil; and president of PBF Logistic and president of PBF Energy, Parsippany, N.J. He has also worked in the investment banking, hedge fund, commodity trading and electric and natural gas sectors.

Brentwood, Tenn.-based Delek U.S. is a diversified downstream energy company with assets in petroleum refining, logistics, asphalt, renewable fuels and convenience-store retailing. The refining assets consist of refineries operated in Tyler and Big Spring, Texas, El Dorado, Ark., and Krotz Springs, La. The c-store business operates more than 250 locations in central and west Texas and New Mexico. Delek U.S. is the largest 7-Eleven licensee in the United States, although the companies have agreed to exit the licensing agreement.The retail c-store business has launched a new c-store brand, DK, and will rebrand all of the 7-Eleven stores by the end of 2021.

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