Mergers & Acquisitions

Icahn Eyeing Delek U.S.?

High-profile investor’s rumored move could stir the U.S. convenience-store pot

BRENTWOOD, Tenn. -- While neither company is talking, refiner CVR Energy Inc. and refiner-marketer Delek U.S. Holdings Inc. got a stock boost on Friday on rumors that high-profile investor Carl Icahn, who owns a controlling stake in CVR Energy, is looking to make a play for Delek U.S., which itself is in the process of acquiring refiner-marketer Alon USA Energy Inc.

The New York Post first reported the story, citing an unidentified source close to the matter.

Tony Miller, executive vice president for Delek US, declined to comment. He told CSP Daily News that the company does not respond to market rumors.

Delek U.S.’s refining segment consists of refineries operated in Tyler, Texas, and El Dorado, Ark. The retail segment markets motor fuel and convenience merchandise through a network of approximately 350 company-operated convenience stores under the Mapco Express, Mapco Mart, East Coast, Fast Food and Fuel, Favorite Markets, Delta Express and Discount Food Mart brand names.

As reported in a McLane/CSP Daily News Flash, shares of Delek U.S. climbed the most in seven years after a New York Post report on Aug. 12 that Sugar Land, Texas-based refiner CVR Energy may be preparing a takeover offer, Bloomberg said.

Shares were up as much as 15%, the most intraday since March 2009, to $17.13, the news agency said. The stock was up 12% to $16.70 at 9:44 a.m. in New York. CVR climbed as much as 5.6%.

There is also speculation that Icahn, who sits on CVR’s board, is building a personal stake in Delek U.S., according to the Post.

Add Alon USA to the Mix

In April 2015, Brentwood, Tenn.-based Delek U.S. entered into a definitive stock purchase agreement with Alon Israel Oil Co. Ltd. to acquire approximately 33.7 million shares, or approximately 48% of the outstanding shares, of Alon USA common stock owned by Alon Israel. It completed that transaction in May.

Alon USA, Dallas, is an independent refiner and marketer of petroleum products operating primarily in the south central, southwestern and western United States. Alon owns 100% of the general partner and 81.6% of the limited partner interests in Alon USA Partners LP, which owns a crude oil refinery in Big Spring, Texas. Alon directly owns a crude oil refinery in Krotz Springs, La. Alon is the largest 7-Eleven licensee in the United States and operates approximately 300 c-stores that sell motor fuels in central and west Texas and New Mexico.

The agreement “presents a significant step in our growth, and the assets fit well strategically and geographically with our existing footprint,” said Uzi Yemin, chairman, president and CEO of Delek U.S. Holdings Inc. “It also provides a step forward, doubling the size of our company, which is one of our target to accomplish every five years.”

Yemin said that "when the market conditions are right" the company will look "very seriously" at acquiring 100% of Alon USA.

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