A Virginia-based convenience store chain is asking TravelCenters of America (TA) to consider their higher acquisition bid after it was announced that BP Products North America Inc. would purchase the truck stop chain.
In a March 27 news release, Richmond, Virginia-headquartered ARKO Corp., “one of the largest convenience store operators in the United States,” asked TA to reconsider previously announced plans for acquisition by BP.
On February 16, BP and TA announced a $1.3 billion cash acquisition agreement that includes TA’s 280 stores in 44 states throughout the U.S. as well as 600 full-service and quick service restaurants and truck maintenance and repair services.
Following this news, on March 14, ARKO issued its own proposal to acquire TA for $1.4 billion, or $92 a share.
“..ARKO believes the Board’s decision regarding ARKO’s proposal was incorrect and not in the best interests of TravelCenters’ stockholders. ARKO’s proposal is superior to BP’s offer of $86 a share, and engaging with ARKO is obviously beneficial for TravelCenters’ stockholders. ARKO’s proposal represents a meaningful premium of $6.00 per share to the value of BP’s offer, adding nearly $100 million in additional value to TravelCenters’ stockholders,” the company argued in the press release.
TA issued a statement confirming that they received ARKO’s proposal and explaining why the TA Board rejected it.
“On March 14, 2023, ARKO submitted an unsolicited, non-binding indication of interest to acquire TA. Following a comprehensive review with its financial and legal advisors, the TA Board unanimously concluded that ARKO’s proposal did not constitute a superior proposal and could not reasonably be expected to lead to a superior proposal. Among the reasons the Board determined that ARKO’s proposal was neither a superior proposal nor likely to lead to a superior proposal was the high level of execution risk resulting from ARKO’s failure to obtain committed financing and that ARKO’s sub-investment grade credit rating was not attractive to Service Properties Trust (Nasdaq: SVC), the landlord of most of TA’s properties,” TA said.
ARKO continues to pressure TA to reconsider plans to partner with BP.
“ARKO urges TravelCenters’ Board to seriously consider ARKO’s superior proposal to acquire TravelCenters of America. ARKO believes it is riskless to TravelCenters’ stockholders for TravelCenters’ Board to engage with ARKO, and that doing so could reasonably be expected to lead to a superior proposal,” the company said.
ARKO is a 100% owner of GPM Investments, LLC, which operates 3,200 locations in 33 states and Washington, D.C. and is the 6th largest convenience store chain in the country, according to the company website. Associated convenience store brands include fas mart, Young’s, Li’l Cricket, Scotchman, and Jiffi Stop.