DENVER, Jan. 30, 2017 /PRNewswire/ -- John M. Fox, beneficial owner of 1,542,072 MPLX common units, and 20,900 shares of Marathon Petroleum Company,
today reaffirms his stance against Marathon Petroleum Corporation's proposed January 3, 2017
plan and offers additional support for a plan that provides immediate uplift in value for MPC shareholders.
A new slide deck highlighting key points on growth and valuation implications can be found at www.itjustmakessensegary.com.
John Fox commented, "The engagement that I have had with investors, analysts and other
stakeholders since my open letter to management on January 11, 2017, has confirmed that there are
many that also share my concern around management's proposed path forward. The proposed plan is just another complex
financial engineering plot that has too many unanswered questions that ultimately sends MPLX down a slow growth path of value
destruction. As MPLX's largest unitholder, MPC must understand the implications that growth expectations at the MPLX level have
on its own value.
"Companies with slow distribution growth are put in the penalty box, putting downward pressure on the unit price and upward
pressure on the yield. Based on our analysis of the MLP space, under a high growth valuation scenario MPLX could expect to
attract a 4.1% yield implying a $55.12 per unit price, a 50% uplift to market close on January 12, 2017. Alternatively, under a slow growth plan like the one MPC is currently proposing, MPLX
could expect to attract a 7.8% yield implying a $28.97 per unit price, a 20% decline in value
compared to the market close on January 12, 2017. This swing has material implications for MPC
shareholders. By dropping down slow growth refining assets, MPLX's organic growth assets will be strangled, diminishing MPC's
fully integrated value.
"Don't put MPLX in the penalty box. Our simple and less risky plan puts us on a growth path to value
creation. If managed properly, MPLX has years of double digit organic growth ahead with high rate of return projects built on its
substantial core infrastructure. This high growth path retains management's focus on high-return EBITDA projects in the
Marcellus. We estimate the adoption of our plan results in an immediate uplift in value for MPC shareholders of between
$20-$30 per share.
"The high growth path is the only real path to value creation for MPC and MPLX. Execute the IDR elimination plan immediately
at a fair and transparent price and set MPLX free with its own focused and growth driven management team. It
Just Makes Sense!"
About John M. Fox
John Fox is the co-founder of MarkWest Hydrocarbon, former CEO, Chairman and Director of
MarkWest Energy GP, L.L.C. ("MarkWest GP"), the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial
owner of 1,542,072 MPLX common units, and 20,900 shares of Marathon Petroleum Company, through its merger with MarkWest in
2015 and from follow-on investments. Mr. Fox worked to eliminate the Incentive Distribution Rights (IDRs) at MarkWest in 2007,
creating tremendous value that ultimately led to the successful acquisition of MWE by MPLX in 2015. MarkWest generated a 143.3%
total return and grew from a $1.2 billion market cap to an $8.6
billion market cap for the period of September 5, 2007, when the IDRs were eliminated, to
December 4, 2015.
Disclosure:
John Fox is providing this material for general informational purposes only. None of the
information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those
of Mr. Fox as of January 26, 2017 and are subject to change at any time due to changes in market,
economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other
member of the Fox family. The information and opinions contained in this material are derived from proprietary and
non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the
accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass.
Reliance upon information in this material is at the sole discretion of the reader.
Contact:
John Fox
Johnfox@itjustmakessensegary.com
720-213-6439
www.itjustmakessensegary.com
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SOURCE John M. Fox