CST to Purchase More Ownership Interest in CrossAmerica
SAN ANTONIO — CST Brands Inc.’s board of directors approved a plan to purchase up to an aggregate of $50 million of common units representing limited partner interests in CrossAmerica Partners LP.
“The CrossAmerica unit price presents an attractive investment yield and this plan reinforces CST’s continued support of CrossAmerica and is in recognition of the strength of the partnership’s long-term business strategies,” said Kim Lubel, chairman and CEO of CST Brands.
CST Brands, parent of the Corner Store and Nice N Easy brands in the United States, already owns and controls the general partner of Allentown, Pa.-based CrossAmerica. In addition, CST is the beneficial owner of 5,284,308 common units of CrossAmerica, representing a 15.9-percent ownership interest in the outstanding limited partner interests in the master limited partnership. CrossAmerica units were trading for slightly more than $24 per unit in Monday morning trade.
Under the program, purchases can be made in amounts, at prices and at such times as CST Brands or one of its subsidiaries deem appropriate, subject to market conditions.
“This announcement comes on the tails of management meetings we hosted last week, when CST's management team suggested it remains committed to supporting its MLP partner,” wrote Bonnie Herzog, managing director of beverage, tobacco and convenience store research for Wells Fargo Securities LLC. “We believe this is a very encouraging sign of the health and strength of the CST-[CrossAmerica] partnership.”
San Antonio-based CST Brands Inc. operates approximately 1,900 locations throughout the Southwest, New York and eastern Canada.
CrossAmerica Partners LP is a wholesale distributor of fuels, which distributes fuel to 1,100 locations throughout 23 states.