NEW YORK -- Major oil refiner Marathon Petroleum Corp. (MPC) should buy CST Brands Inc., Jim Cramer, stock-market maven and host of CNBC's Mad Money said on Monday.
"I think it would make a ton of sense for Marathon Petroleum to acquire CST," he said. "I think the fundamentals are excellent, and the stock deserves to go higher even without a deal."
In a takeover situation, based on what MPC paid for Hess Retail and what Energy Transfer Partners (ETP) paid for Susser, Cramer thinks that CST Brands would be worth as much as $4.8 billion at enterprise value. That translates into a $53.40 share price, or 26% premium to where the stock is currently trading.
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Both companies declined a CSP Daily News request for comment, saying only that they do not comment on rumors or speculation.
Findlay, Ohio-based MPC is the nation's fourth-largest refiner, with a crude oil refining capacity of approximately 1.7 million barrels per calendar day in its seven-refinery system. Approximately 5,400 independently owned gas stations across 19 states sell Marathon-branded fuel. And Enon, Ohio-based Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 22 states. MPC also owns, leases or has ownership interests in approximately 8,300 miles of pipeline. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership (MLP). MPC's fully integrated system provides operational flexibility to move crude oil, feedstocks and petroleum-related products efficiently through the company's distribution network in the Midwest, Southeast and Gulf Coast regions.
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