CST Brands Begins Debt Placement Ahead of Spinoff
CST Brands is expected to be spun off from Valero on May 1. Current shareholders will receive one share of the newly formed company for every nine Valero shares owned.
San Antonio-based CST Brands, Valero's retail division, will operate nearly 1,900 convenience store and gas station locations, including 1,032 in the United States. It will employ approximately 12,000 people.
The large retail chain is expected to maintain Valero Corner Stores as its operating banner. According to CST Brands, it will sell the senior notes based on market conditions. However, the company did not state in its news release what it intends to use the funds for.
Valero stated it will spin off 80 percent of CST Brands, while retaining a 20-percent interest for six months after the distribution, and then divest that interest as market conditions warrant.
Discussing the spinoff in January, Valero Chairman and CEO Bill Klesse said the company believes a separate retail business will perform well and unlock value for its shareholders.
"In addition to its large and geographically diverse network of high-quality sites, the retail business has a long history of strong brand recognition and financial performance, as well as significant growth opportunities in merchandise, foodservice and new-build locations," he said.