SU:CC - Suncor's gas stations could fetch up to C$8.9B Credit Suisse analyst says

Suncor Energy ( NYSE: SU ) could generate C$9.6B-C$11.2B in pre-tax cash proceeds and C$7.7B-C$8.9B in after-tax cash proceeds for its retail gas station network, Credit Suisse analyst Manav Gupta said Monday.

Suncor ( SU ) entered into an agreement with Elliott Management to appoint three new independent directors to the energy company's board and conduct a strategic review of its downstream retail business.

"We see a possibility that like Marathon Petroleum, Suncor will end up selling its retail business," Gupta wrote. "We believe the primary use of proceeds could be to support higher shareholder returns as was the case with Marathon's Speedway sale proceeds."

Like Suncor ( SU ), Marathon faced pressure from activist investor Elliott Management, which called for performance improvements and the sale of its retail business before it sold its gas station business to Seven & i Holdings for US$21B in 2020.

Circle K chain owner Alimentation Couche-Tard ( OTCPK:ANCUF )( OTCPK:ANCTF ) is seen as a potential bidder for Suncor's ( SU ) 1,500-plus Petro-Canada stations, although a deal likely would come with significant antitrust hurdles.

If Couche-Tard wanted to buy the business, it may need to divest half of the gas stations due to antitrust issues, Stifel GMP analyst Martin Landry said.

Criticizing operational and safety issues which have plagued the company in recent years, Elliott disclosed a 3.4% stake in Suncor in April .

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