Christian Holfinger, a communication manager with Speedway, referred questions to Marathon, the parent company. Marathon released a statement Wednesday stating that the company will maintain “an ongoing dialogue with our shareholders as we continue to evaluate opportunities to deliver more value for our shareholders. We will thoroughly evaluate Elliott’s proposal and look forward to continuing our constructive engagement around these issues.”
The proposal seeks to make Speedway it’s own independent company and by doing so argues that upon separation it would be the largest U.S. listed convenience store operator.
Speedway is a major employer in Clark County with approximately 1,500 people locally. The company has over 40,000 employees nationally, according to Jamal Kheiry, a spokesperson for Marathon, which currently has its refining arm, pipeline division and the Speedway branded gas stations under its umbrella.
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Members of Marathon’s board received a letter from Elliott, one of the company’s largest shareholders, on Wednesday. The hedge fund stated that it wanted to outline “a path forward for Marathon to remedy the company’s chronic under performance, to improve its businesses and to unlock significant, sustainable value for its shareholders,” according to the letter.
The oil company’s shares increased more than 8 percent Wednesday, as the U.S. benchmark oil price fell by 1.4 percent, according to The Wall Street Journal. However, Marathon’s stock had declined roughly 32 percent since agreeing to a $23 billion deal last year to acquire rival Andeavor, the newspaper also reported.
The acquisition was criticized by Elliott, which manages funds that collectively own common stock and economic equivalents representing approximately 2.5 percent of economic interest in Marathon. The firm argued that the acquisition went against Marathon’s past statements to simplify its corporate structure.
“Thus, while Marathon executives were telling investors that they were taking a critical look at their structure, they were in fact already contemplating and in the process of executing a massive recommitment to their failed conglomerate model, as detailed in the merger proxy for the Andeavor transaction,” Elliott said in the letter.
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Elliott called for similar changes three years ago. While Marathon did implement some changes, its board announced in the fall of 2017, that Speedway was more valuable to shareholders if it remained under their umbrella. Company officials said the decision was made after careful consideration and review led by an independent committee of the board.
Since then, Speedway has made significant investments in Clark County. Last year, it announced that it would be adding 300 new jobs at its corporate headquarters in Enon as part of a $48 million expansion. Construction on a 140,000 square-foot building, part of the expansion, started late last year and is slated to be completed next year.
The News-Sun previously reported that Clark County commissioners approved a 100-percent, 15-year tax abatement last fall following talks to help necessitate the growth. Commission President Melanie Flax Wilt did not comment on the recent proposal made by Elliott but said Speedway’s decision to have its headquarters in Enon and its decision to expand has had a very positive economic impact on the area.
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