UPDATE 1-Valero board approves spinoff of retail business
April 4 (Reuters) - U.S. refining company Valero Energy Corp said on Thursday its board of directors approved the spinoff of its retail business, CST Brands Inc.
Energy companies have increasingly looked to split off business units as a means of achieving a higher valuation for them. For example both ConocoPhillips and Marathon Oil Corp spun off their refining businesses into separate publicly traded companies.
Valero said last summer that it would explore options for the gasoline and convenience stores it owns in the United States and Canada, including a spinoff that gives its shareholders ownership of the retail unit.
The distribution of 80 percent of outstanding CST shares to Valero shareholders is expected to occur May 1 in a tax-free transaction. Valero will own the other 20 percent of CST for six months before considering divesting its interest, the San Antonio company said.
Shares of Valero rose to $42.05 in post-market trading, up from a New York Stock Exchange close of $41.44.
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