Shares of Murphy Oil (NYSE:MUR) surged after the company announced that it will spin off its U.S. marketing business and sell assets in the United Kingdom.
After the spin-off, Murphy Oil will emerge as an oil production company, with operations in the U.S., Malaysia and Canada. The sales and marketing unit, Murphy USA, will operate 1,100 retail gas stations, two ethanol facilities and seven fuel terminals, Reuters noted.
In addition to the changes, Murphy Oil’s board approved a $1 billion stock repurchase program and a one-time dividend of $2.50 a share. The dividend will result in a repayment of $500 million to investors.
Shares of Murphy Oil soared more than 8% on the news.
The spin-off of Murphy USA is estimated to be finalized in 2013.
The moves come in response to complaints from activist investor and Third Point LLC hedge fund manager David Loeb, who has suggested that the company’s stock should be priced 60% above current levels. Loeb had recommended selling certain company assets.