TravelCenters of America Sticks by Decision to Reject ARKO's Offer

WESTLAKE, Ohio — TravelCenters of America Inc. (TA) stands by its decision to sell the company to BP.

The travel center operator stated on March 28 that the "conditional, unsolicited and unfinanced proposal" from ARKO Corp. is neither superior to the $1.3 billion deal with BP, nor is it likely to lead to a superior proposal.

Earlier in the week ARKO, the Richmond, Va.-based parent company of GPM Investments LLC, called its $92-per-share acquisition proposal superior to the deal that calls for BP to pay approximately $86 per share in cash, and asked TA to reconsider its offer, as Convenience Store News previously reported.

However, following a comprehensive review with financial and legal advisors, TA's board of directors unanimously concluded that ARKO's proposal did not constitute a superior proposal and could not reasonably be expected to lead to a superior proposal, the company said. The board cited factors such as a high level of execution risk resulting from ARKO's failure to obtain committed financing as well as its sub-investment grade credit rating not being attractive to Service Properties Trust (SVC), the landlord of most of TA's properties, as contributing to its decision.

TA's board unanimously approved of the BP acquisition. Under the terms of the merger agreement, BP will acquire all outstanding shares of TA common stock at an 84 percent premium to the average trading price of the prior 30 trading days before announcement.

According to TA, the BP deal is the result of an extensive process during which TA and its advisors engaged with multiple potential buyers who the TA board believed could close with cash on hand or otherwise had committed financing. Additionally, in order to meet SVC's minimum credit criteria for the new tenant and guarantor of the leases between TA and SVC, only parties with a minimum investment grade credit rating of BBB/Baa2 were invited into the process.

BP is financing the transaction with cash on hand and has an investment grade credit rating of A3/A-, while ARKO requires third-party capital to close any potential acquisition and its sub-investment credit rating is B+/B2, several notches below BBB/Baa2.

TA also noted that a condition to consummation of the BP acquisition is approval by shareholders who own a majority of TA's shares outstanding. SVC, which owns 7.8 percent of TA's shares outstanding, and The RMR Group, which owns 4.1 percent of TA's shares outstanding, have both agreed to vote their shares in favor of the transaction.

Westlake-based TravelCenters of America Inc. is the nation's largest publicly traded full-service travel center network. Founded in 1972, its more than 18,000 team members serve guests in 281 locations in 44 states, 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, travel stores, car and truck parking, and other services dedicated to providing great experiences for its guests.

TA is committed to sustainability, with its specialized business unit, eTA, focused on sustainable energy options for professional drivers and motorists.

The operator has more than 600 full-service and quick-service restaurants and nine proprietary brands.