CALGARY, Alberta -- Husky Energy Inc. will undertake a strategic review and could decide to sell its retail and commercial fuels business and its Prince George Refinery in Canada, the company said.
Founded in Cody, Wyo., in 1938 as the Husky Refining Co., Husky, now based in Calgary, Alberta, has become an integrated energy company. At one time, its retail network included more than 1,200 outlets in the United States and more than 600 outlets in Canada. The company sold its remaining U.S. retail outlets to Marathon Oil in 1984.
Husky’s current retail and commercial network consists of more than 500 gas stations, convenience stores, travel centers, cardlock operations and bulk distribution facilities from British Columbia to New Brunswick.
The myHusky Rewards loyalty program has about 1.6 million members.
The refinery, in Prince George, British Columbia, supplies refined products to retail outlets in the central and northern regions of the province.
A sale of the company’s U.S. refineries is not under consideration. It owns a refinery in Lima, Ohio, that produces approximately 25% of the gasoline consumed in Ohio annually, and a refinery in Superior, Wis. Husky also has 50% ownership in a BP-operated refinery in Toledo, Ohio.
Husky’s decision to review and consider a sale of noncore downstream assets comes as it increasingly focuses on core assets in its integrated corridor and on its offshore business in Atlantic Canada and the Asia Pacific region.
“Our retail network and the Prince George Refinery are excellent assets, with exceptional employees, which have made solid contributions to Husky over the years,” CEO Rob Peabody said. “However, as we further align our heavy oil and downstream businesses to form one integrated corridor, we’ve taken the decision to review and market these non-core properties. We expect the businesses will be highly marketable, attracting strong interest and valuations. Husky delivers value to its customers, and we anticipate that high level of quality and service will continue whether or not the businesses are sold.”
Jon Morrison, analyst for Toronto-based CIBC, values these assets at about $835 million. “We believe the retail network naturally has a couple strategic buyers that should be interested, while the refinery has a smaller list of potential purchasers given the scale, size and location of the facility,” he told the Canadian Press.
“We do expect the businesses to attract strong interest, but we aren’t specifying what our internal threshold for doing a deal would be,” Husky spokesperson Mel Duvall told the Globe & Mail in a separate report.
TD Securities Inc. is acting as financial adviser to Husky, with Torys LLP as legal adviser.