9/15/2023 0 Comments Susser stripesSusser Petroleum must also pay out a majority of its income to unitholders. Firms switch to the MLP structure to avoid taxes, as there is no partnership equivalent to corporate income tax. Limited partners, or unitholders, pay taxes at the individual level, avoiding the double taxation at the company level, but assuming the tax liability at their individual rates. Susser Petroleum's MLP structure benefits investors because it combines the tax benefit of a partnership, the limited liability of a corporation, and the liquidity of a publicly traded company. This acquisition increases Susser Petroleum's volume of motor fuel sold. Margins on these gallons are higher due to the extra service of getting fuel where it is needed. This business supplies approximately 60 million gallons of diesel to oil field producers. Recently, Susser Petroleum acquired Gainesville Fuel in September 2013. An investor in Susser Petroleum must be aware of the long-term fuel distribution and sale/leaseback arrangements between these two companies. Therefore, Susser Petroleum's growth depends on Susser Holdings. The future success of Susser Petroleum depends on maintaining its master limited partnership status, buying and leasing additional Stripes stores to Susser Holdings, maintaining long-term contracts, and increasing fuel distribution volume. I established a 12-month target price of $39.40 and a hold rating. The GP receives compensation based on performance of the MLP and the LP receives periodic income distributions from the MLP's cash flows. In addition, Susser Holdings owns 50.2% of the LP. Susser Holdings is the sole owner of the GP. An MLP is a publicly traded limited partnership in which the general partner ( GP) is accountable for managing the MLP's affairs, and the limited partners (LP) are the parties that provide equity capital to the MLP. Susser Petroleum was formed as a master limited partnership with Susser Holdings as the owning partner. Susser Petroleum is also among the largest distributors of Valero and Chevron branded motor fuel. Susser Petroleum produces a margin by buying motor fuel from major oil companies and independent refiners, and selling the fuel to retail outlets in Texas, New Mexico, Oklahoma, and Louisiana. Additionally, Susser Petroleum receives rental income from real estate holdings and sale/leasebacks to Susser Holdings, third-party dealers, and independent operators of consignment shops. Susser Petroleum Partners LP is a fee-based wholesale distributor of motor fuel to Susser Holdings Corporation and other third parties. In addition, ETP will become the general partner of Susser Petroleum, owning approximately 11 million SUSP common units, for about 50.2% ownership. This offer valued at approximately $1.8 billion consists of either $80.25 in cash or 1.4506 ETP common units, or a combination of both, for every share. On Monday, April 28, 2014, Energy Transfer Partners ( ETP) announced a merger to acquire Susser Holdings ( SUSS) and in turn become general partner of Susser Petroleum (SUSP).
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