Walmart to have opportunity to develop a proprietary gasoline program at the supercenters that are not being supplied by Murphy USA.
A shift in direction of the company’s relationship with Walmart will allow Murphy USA Inc. greater flexibility to develop sites independently.
With this shift, the Board of Directors has authorized a strategic allocation of capital for the company to pursue new additional independent growth opportunities, and to undertake a share repurchase program of the company’s common stock. The Board has authorized up to $500 million in total for the two capital programs through Dec. 31, 2017.
The company will continue to build Murphy Express branded stores at locations acquired from third parties, which achieve similar operational performance metrics as Murphy USA branded locations and represent over 50% of the company’s rapid store growth in the last five years. In addition, the company has developed a large store format which will allow for higher impact growth from new locations going forward. To support this ongoing expansion within our core marketing areas and into new marketing areas, the company will continue to invest in and grow its Midstream positions.
“Since our spin, we have strategically positioned Murphy USA to be a strong independent company that can achieve a high level of organic growth and shareholder returns with or without another large acquisition of store locations from Walmart,” said Andrew Clyde, president and CEO. “Through our existing store pipeline, growing third party land bank, our business improvement initiatives that enhance our core fuels business and differentiated retail capabilities, and the strength of our balance sheet, Murphy USA will continue to grow our base of value-seeking customers independently in both new and existing target markets with great clarity and confidence. Our share repurchase plan is a reflection of our confidence in the future and a commitment to maximizing shareholder value.”
Walmart will have the ability to develop a proprietary gasoline program on supercenter locations that are not currently supplied or committed to be supplied by Murphy USA.
The company will continue to work closely with Walmart on existing Murphy USA locations and anticipates further collaboration opportunities in the future.
The timing and number of shares repurchased under the program will be determined by management at its discretion, and will depend on a number of factors, including compliance with the terms of our outstanding indebtedness, general market and business conditions, applicable legal requirements and other growth opportunities available to the company. Murphy USA Inc. expects to use its balance sheet flexibility, operating cash flow and proceeds from the sale of non-core assets to fund the repurchase program.