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Marathon to spin off assets

Findlay firm plans IPO of part of pipeline, storage division

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Marathon Petroleum Corp. in Findlay filed paperwork with the U.S. Securities and Exchange Commission for an IPO of a subsidiary called MPLX. Stock of Marathon Petroleum, itself a recent spinoff of Houston-based Marathon Oil Corp., fell 71 cents a share Tuesday to close at $45.36.

The Blade/Andy Morrison
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FINDLAY -- Marathon Petroleum Corp. announced Tuesday it plans to spin off part of its pipeline operations in a $365 million initial public offering.

The Findlay-based company said it had filed paperwork for an IPO of a subsidiary called MPLX, which will own just more than half of the company's pipelines and oil storage facilities in the Midwest and the Gulf Coast region. It will also own a butane cavern in West Virginia.

Marathon Petroleum itself was spun off from Houston-based Marathon Oil Corp. last year. It is the nation's fifth-largest oil refiner.

The announcement appears to signal a victory for Jana Partners LLC, which earlier this year became Marathon Petroleum's largest stockholder. Jana had called for the company to separate its business divisions.

The paperwork for the offering was filed with the U.S. Securities and Exchange Commission on Monday.

Marathon Petroleum did not return a call for comment, and Jana did not release a statement about the IPO.

Marathon Petroleum's stock fell 71 cents a share Tuesday to close at $45.36.

Jana became Marathon Petroleum's largest investor in January. The hedge fund acquired about 19.7 million shares, a 5.5 percent stake in the company.

Jana quickly contacted Marathon Petroleum management about "business strategy, corporate and asset structure, capitalization, dividend and repurchase policy, governance, and related matters" with the stated intention "to bring about changes to increase shareholder value as well as pursue other plans or proposals that relate to or would result in any of the matters set forth."

At the time, analysts said Jana's interest in Marathon Petroleum was likely to force it to form a master limited partnership to control some or all of its 9,600 miles of pipelines or its chain of Marathon and Speedway gas stations.

Weeks later, Marathon Petroleum said it was considering a spinoff of its pipeline assets. Marathon Petroleum's stock price surged nearly 10 percent on the news, rising to $41.68 a share from $38.

Two weeks after Marathon Petroleum's announcement, Jana announced it had reduced its stake in the company to 4.5 percent.

In an SEC filing, Jana indicated it had paid an average of $32.28 for its Marathon shares, and sold about 18 percent of its stake for about $43.63 a share.

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