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Sunoco LP (NYSE:SUN), a $7.53 billion market cap petroleum refining company currently showing signs of being undervalued according to InvestingPro analysis, announced on May 26, 2025, an amendment to its arrangement agreement with Parkland Corporation, which was initially established on May 4, 2025. The amendment details adjustments to the funding mechanics and proration formula for the transaction. All other material terms of the original arrangement and plan remain unchanged. This information is based on a press release statement.
The amendment comes as part of Sunoco’s strategic moves, which also include the recent acquisition of NuStar Energy L.P. (NYSE:NS) and the sale of 204 convenience stores to 7-Eleven, Inc. These transactions are believed to be instrumental in shaping Sunoco’s financial and operational framework, with the company currently generating $22.37 billion in revenue and $1.42 billion in EBITDA over the last twelve months. The pro forma financial information, reflecting these changes, has been included in the Circular distributed by Parkland on May 28, 2025.
The Circular contains unaudited pro forma condensed combined financial information for Sunoco for the twelve months ended December 31, 2024, and for the three months ended March 31, 2025. This pro forma financial information is furnished to provide insights into the financial implications of Sunoco’s recent business activities, including the amended arrangement with Parkland.
Investors and stakeholders are advised that the information provided is not considered filed for purposes of Section 18 of the Exchange Act and should not be deemed incorporated by reference into any other document filed under the Securities Act. The detailed terms of the amendment can be found in the full text of the Amendment, filed as Exhibit 2.1 to Sunoco’s Current Report on Form 8-K.
Sunoco’s strategic decisions are likely to impact its business trajectory and market position, with analysts setting price targets between $61 and $68. The amendment to the arrangement agreement with Parkland signifies a calculated move to optimize the transaction’s terms in line with the company’s financial strategy. The pro forma financial information provided in the Circular will offer a clearer picture of the post-transaction financial landscape for Sunoco, which currently maintains a 6.5% dividend yield and a FAIR financial health score according to InvestingPro’s comprehensive analysis. For deeper insights into Sunoco’s valuation and growth prospects, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Sunoco LP reported robust financial results for the first quarter of 2025, with an adjusted EBITDA of $458 million and a distributable cash flow of $310 million. The company also announced a 1.25% increase in its distribution to $0.896 per common unit. Sunoco’s strategic acquisitions, including Parkland Corporation for $9.1 billion and TanQuid for €500 million, were highlighted as significant moves to bolster its market presence. In a related development, Sunoco LP amended its credit agreement, increasing the letter of credit sublimit to $250 million, which is tied to its acquisition of Parkland and its subsidiaries.
Additionally, Parkland Corporation has filed its Management Information Circular, preparing for a shareholder meeting to discuss a strategic transaction with Sunoco. The deal is expected to offer a 25% premium to Parkland shareholders. Meanwhile, Stifel analysts raised Sunoco’s stock target to $66, maintaining a Buy rating, following Sunoco’s earnings report and its strategic acquisitions. Conversely, Jefferies analyst Christopher Sighinolfi reduced Sunoco’s stock price target to $6, maintaining a Hold rating, due to potential legislative changes impacting the company’s operations. These developments indicate significant strategic maneuvers by Sunoco and Parkland, with potential implications for their future growth and market positioning.
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