Murphy USA Innovates in Face of Possible Spinoff

by Luke Jones  on Monday, Jul. 9, 2012 12:00 am  

Howard O. Gibson, dean of the School of Business and director of entrepreneurship at Arkansas Baptist College, fills up at the Murphy Oil gas station at 4448 E. McCain Blvd. in North Little Rock. (photo by Michael Pirnique)

In January, Wood said he would be discussing the spinoff with the Murphy board of directors through the first half of the year.

So why would Murphy want to spin off half its revenue?

Back in January, Wood told analysts that the spinoff would "unlock the value" of the retail arm, claiming that it was "unrealized within the current corporate structure."

"You can spin it off to shareholders and it will still be in the family," Gheit said. "It will command a higher value to the shareholders."

A major spinoff isn't without precedent at Murphy. In 1996 the company spun off its timber assets into Deltic Timber Corp., a publicly traded company also headquartered in El Dorado and controlled by members of the Murphy family.

"There are rumors that David wanted to [spin off Murphy USA] immediately," Gheit said.

There was another rumor, he added, that there was resistance to the spinoff in the company. Perhaps it was true: Before the first half of the year was over, Wood was gone. His retirement was announced June 20, and he was immediately replaced by Steve Cossé, a board member who had previously served as EVP and general counsel.

In any case, Gheit said, Wood was "in the hot seat" thanks to Murphy's overall underperformance of late.

The last time Wood publically spoke of Murphy USA was in May, at the company's annual meeting for shareholders. He talked about new directions for the gas stations.

There would be changes to the ways the kiosks were structured, for example. Wood told shareholders that the company would be expanding the shops to include more snack and beverage space, as well as increasing the size of the pavilions themselves.

There have been recent changes to the company, too. During the past year, Murphy USA has entered social media in a big way, with a new website, Twitter feed, gas price comparison app and a mobile payment method. The company has also made forays into electric vehicle chargers.



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