Hess Corp. believes its retail subsidiary is being overshadowed by the oil conglomerate's refining operations and has decided to pursue a dual path to separate out is convenience store business; one through a potential spin off into a separate company, or two through the outright sale of the business.
Hess Retail Corp. is the biggest operator of convenience stores along the East Coast and the fifth largest in the United States by number of company-operated gas station/convenience stores. As of Sept. 30, it had 1,258 company-operated locations, of which 1,177 were convenience stores and 81 were travel plazas. Another 96 locations are operated by franchisees that either own the site or lease the site from Hess.
This week, Hess Retail filed a Form 10 registration statement with the U.S. Securities and Exchange Commission (SEC) related to its plans for a possible public spin-off.
At the same time, Hess said it will solicit offers from outside firms interested in buying its entire retail business.
According to the spin-off filing, Hess Retail's growth has been limited by Hess's ownership due to competition for capital and corporate resources with other Hess businesses.
If spun out as a separate business, Hess retail plans target its most attractive markets for additional growth, including Long Island, Massachusetts, north and central New Jersey and New York. It also would like to expand into new financially attractive markets that were legally off-limits due to its affiliation with the oil giant's refining activities.
Hess Retail said the travel plaza market in particular represents an important area for future growth, given the integrated portfolio of services such as gas, food and convenience retail, that travel plazas provide.
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