RE:RE:Powerhouse - Lookout World Here We Comenewcoin wrote: This is what I wanted to hear - strength, commitment and confidence:
"After careful consideration, the Board has concluded that retaining and optimizing the Company's retail business will generate the highest long-term value for shareholders and therefore, has unanimously decided to retain and continue to optimize the network and expand strategic partnerships for the Petro-Canada retail business that enhance our capabilities and capture increased revenue and cash flow opportunities," said Board Chair Mike Wilson. "Petro-Canada is a unique, differentiated, and strategic asset due to its strong national network and best in market consumer brand and loyalty program."
One of my friends who was a senior bureaucrat in the Federal Government called me after reading the news regarding the SU decision concerning PetroCanada. Back in the day he worked in the Energy Department was a key figure in the privatization of PetroCanada and subsequent events.
He couldn't stop laughing during our conversation as he had drafted over the years countless Government PRs for Cabinet Ministers where the true facts were sugar coated and written to create the wrong inpression. He said a truthful PR would read as follows....
"The company contacted and entered into discussions with a number of potential suitors. After serious exploratory talks with these suitors, none of them were willing to buy PetroCanada for a price that the company was hoping for. Sale of PetroCanada at the price they were willing to pay was less than the value of the company to Suncor at the present time. That combined with the fact that a sale would involve a further writedown of that asset following the writedown for Fort Hills, the Board determined that such an action would be detrimental to its shareholders."
He further told me that the primary reason that suitors were not ready to pay a big price for PetroCanada was simple math. As the number of EVs grows over the next couple of decades and the owners charge their vehicles at home, sales at traditional gas stations like Petrocanada will plummet. Further, EVs don't require oil changes and much reduced need for brake jobs so the bread and butter of the PetroCanada garages will also plummet.
The end result in his opinion is that Suncor has decided to keep an albatross around its neck as opposed to taking its lumps and using the proceeds to grow the company.