TravelCenters of America, which in mid-February reached an agreement to be acquired by bp Products North America Inc. for $1.3 billion in cash, has received a rival bid. On March 14, TA received an unsolicited, non-binding indication of interest from an unnamed publicly traded fuel supplier and convenience-store operator it calls “Party G” to purchase 100% of the equity interests of TA for $92 per share, according to a filing with the U.S. Securities & Exchange Commission (SEC).
TA’s stock price rose 2.1% after disclosing it received a $92 a share offer, however, on Wednesday, the TA independent board members determined that the offer from Party G didn't constitute a superior proposal to the bp deal, according to the SEC filing. The board members said the offer would require “significant” third-party financing and there was no firm commitment from a potential financing source to provide such financing and the financing markets “remain uncertain.”
A deal with bp, at $86 per share, is still subject to TA shareholder and regulatory approval. The possible acquisition by bp was the result of TA receiving unsolicited interest to be acquired. In response, TA’s board hired financial and legal advisors as part of a formal process to consider a potential sale. This process ultimately included competitive rounds of bidding from potential buyers that resulted in the bp transaction, unanimously approved by the TA board, said TA.
- BP is No. 7 and TravelCenters of America is No. 29 on CSP’s Top 40 update to the 2022 Top 202 ranking of U.S. convenience-store chains by company-owned store count. Watch for the updated list in June.
The proposal from Party G indicated that it planned to finance the purchase through a combination of cash on hand, external financing and lines of credit with a 30-day timeline to conduct diligence and sign definitive agreements.
Party G indicated that it was prepared to enter the lease documentation under substantially the same terms as bp, including restating guarantees of leases on the same terms as the agreement that would include having Party G as the guarantor. The Party G proposal also included a letter from a potential financing source indicating that, “subject to certain terms and conditions, including pricing,” it was prepared to commit to finance the acquisition.
TA and bp filed notifications of the merger with the Federal Trade Commission (FTC) on March 9, and the initial 30 day review period expires on April 10. Board Chairman Adam Portnoy advised the TA board that the board of trustees of Service Properties Trust (SVC), the landlord of most of TA properties and all of its independent trustees had reached a preliminary consensus that given Party G’s credit rating and financial conditions, SVC would not engage in negotiations with or consent to the assignment of the lease to Party G in connection with a change of control of TA.
Westlake, Ohio-based TA, a publicly traded, full-service travel center network, has 280 locations in 44 states and Canada, principally under the TA, Petro Stopping Centers and TA Express brands. Offerings include diesel and gasoline fuel, truck maintenance and repair, full-service and quick-service restaurants (QSR), travel stores, car and truck parking and other services. The company operates more than 600 full-service and quick-service restaurants and nine proprietary brands, including Iron Skillet and Country Pride.
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