Mergers & Acquisitions

Delek US Buying Back Stock From Icahn Group

Deal includes agreement to withdraw director nominations, halt additional share acquisition
delek us

BRENTWOOD, Tenn. — Delek US Holdings Inc. has entered into an agreement with Carl Icahn and the Icahn Group for the purchase of $64 million, or about 50%, of Delek US’s common stock the Icahn Group owns, for $18.30 per share. Under the agreement, the Icahn Group will withdraw its nomination of directors and agree to a standstill restriction through the completion of the company’s 2023 annual stockholders meeting, including not acquiring additional shares.

The price is the closing price of the company’s common shares on March 4, 2022, the last trading day prior to the execution of the agreement. Delek US will use cash on hand to fund the share repurchase, it said.

The companies expect the share repurchase to close no later than March 11, 2022, subject to customary closing conditions, after which the Icahn Group will own approximately 3.48 million common shares of Delek US, representing approximately 4.93% of the company’s outstanding shares.

“The combination of a strong cash balance and a robust refining margin environment provide us with flexibility to effectuate this transaction,” said Uzi Yemin, chairman, CEO and president of Delek US Holdings. “This share repurchase reflects our confidence in the underlying business and reduces our shares outstanding by approximately 4.7%. Moving forward, we will continue to focus on running our system safely and reliably in an effort to capture the full benefits that this strong macro environment offers.”

Icahn, through his IEP Energy Holding LLC, New York, recently nominated three candidates for election to the Delek US Holdings Inc. board of directors. In 2021, Delek US resisted a call by Icahn’s CVR Energy, a majority shareholder, to sell its more than 250 convenience stores. In a letter, the activist investor suggested that the company’s stock is undervalued and that it could benefit from selling the retail network. Shareholders rejected CVR Energy’s slate of board nominees.

  • Delek US is No. 31 on CSP’s 2022 Top 40 Update to the 2021 Top 202 ranking of U.S. c-store chains by store count. Watch for the full 2022 Top 202 ranking in the June issue of CSP magazine.

Brentwood, Tenn.-based Delek US 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 company’s convenience-store retail business operates approximately 250 stores in central and west Texas and New Mexico. Delek US 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 is rebranding all of the 7-Eleven stores to the new identity.

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