Brentwood, Tenn.-based Delek U.S. Holdings responded to a letter from CVR Energy Inc., its largest shareholder with a 15% ownership stake, that called for changes at Delek and saying the fuel producer’s stock is undervalued. CVR wants Delek to sell its more than 250 retail convenience stores in Texas and New Mexico.
CVR also advised Delek to close a pair of oil refineries in Arkansas and Louisiana. In addition, CVR wants to replace three of Delek’s board members with its own nominees. CVR, however, said that speculation it is interested in taking over Delek is incorrect. The letter from CVR CEO David L. Lamp claimed Delek “desperately needs new strategic direction.”
Delek U.S. responded in a lengthy statement that it welcomes dialogue with its shareholders and constructive input related to enhancing shareholder value. “The Company’s Board of Directors and management team are committed to acting in the best interest of all shareholders, and regularly evaluate all available options to create and deliver value,” the statement read.
It continued: “Under the leadership of an engaged and experienced Board and management team, Delek U.S. has built a broad portfolio of integrated assets in strategically important geographies, providing substantial value for its customers and partners. We have run at refinery utilization rates above industry average throughout 2020, driven by our positioning in attractive niche markets. Contributions from recent midstream investments are expected to gain momentum into 2021 and 2022.”
The statement outlined Delek’s efforts to navigate the COVID-19 crisis and ensuring the health and safety of its workforce and maintaining financial flexibility.
“The Delek U.S. Board comprises seven highly qualified directors, six of whom are independent and all of whom are established industry leaders with deep expertise and experience that align with the Company’s long-term strategy,” the statement read.