CST Brands To Buy General Partner Of Lehigh Gas Partners; Stock Up 14%

(RTTNews) - CST Brands Inc (CST), a retailer of motor fuel and convenience merchandise, Wednesday agreed to buy Lehigh Gas GP LLC, the general partner of Lehigh Gas Partners LP (LGP), from Lehigh Gas Corp in a cash and stock deal. CST Brands also will acquire the associated Incentive Distribution Rights of LGP.

The terms of the deal comprise $17 million in cash and about 2.044 million shares of CST common stock. Based on the closing share price of CST Brands stock as of August 5, the deal is valued at about $85 million.

CST Brands, based in San Antonio, Texas, said the deal creates a sponsor-backed, growth-oriented MLP vehicle; and provides it with a platform for a long-term drop down strategy of its U.S. wholesale fuel supply business.

The deal is expected to close early in the fourth quarter of 2014.

Joe Topper, the chairman and CEO of LGP, will continue as president and CEO of LGP and will join the board of CST Brands.

CST Brands also announced an up to $200 million stock buyback program.

CST Brands stock closed Wednesday at $33.54, up $0.47 or 1.42%, on the NYSE. In after hours, the stock gained $4.71 or 14.04% at $38.25.