Will CST Brands Bite on Takeover Offers?

SAN ANTONIO — CST Brands Inc. is currently mulling takeover offers, with Circle K parent Alimentation Couche-Tard Inc., 7-Eleven Inc. parent Seven & i Holdings Co. Ltd., Sunoco LP, Speedway LLC parent Marathon Petroleum Corp., and OXXO Mexico the most likely bidders, according to a report by CTFN.

As CSNews Online previously reported, Seven & i Holdings and Couche-Tard, as well as private equity firms Blackstone Group LP and Apollo Global Management LLC, were already named as potential buyers, although Seven & i denied such reports. Sunoco, Speedway and OXXO are new names reportedly in the mix to buy the parent of Corner Store locations.

According to the news outlet, Sikich Investment Banking partner-in-charge Chris Geier believes CST would be willing to sell the company for a $50 per-share price tag. Currently, CST shares are trading in the $44-$45 range on the New York Stock Exchange. If a $50 per-share selling price were achieved, an acquiring company would pay approximately $3.78 billion to acquire CST, per CSNews Online analysis.

"Things are still in the round-one phase, but the intent for a sale is definitely out there," Geier told the news source.

Although CST is certain to have many potential suitors, Casey’s General Stores Inc. will not be one of them. In fact, the Ankeny, Iowa-based convenience store chain is unlikely to make any major acquisition in the near-term, Casey's Chief Financial Officer Bill Walljasper stated Tuesday during the company’s 2016 fiscal fourth-quarter earnings call.

“CST is not in our market or direction we are heading,” Walljasper noted during the call.

He added that despite having the “financial wherewithal” to make a large purchase, Casey's is unlikely to make any major acquisition at this time because sellers are asking for too high of multiples for their assets.

“We won’t just grow for growth’s sake and buy 200 stores,” the CFO said, noting that if sales multiples come down, Casey’s is in excellent position to take advantage and purchase more assets.

San Antonio-based CST Brands has been undergoing a strategic review to determine the best course of action for the company, following financial firm claims that the company’s stock is underperforming compared to its peers, such as Casey’s.