Mergers & Acquisitions

Arko Corp. Boosts Its Offer for TravelCenters of America

Acquirer states its case for engaging with truckstop retailer
Arko bids for TA
Logos/Arko Corp., bp, TravelCenters of America

Arko Corp. isn’t letting go of TravelCenters of America that easily. After TA this week confirmed that its board of directors had rejected Arko Corp.’s unsolicited bid to acquire the company, Arko, parent company of GPM Investments, has provided additional details of Arko’s financing for the proposed acquisition and again asked TA to engage with Arko in the sale process.

In its refusal, TA said that the board “reviewed and determined that the conditional, unsolicited and unfinanced proposal from Arko Corp. … is neither superior to the transaction TA previously agreed to with bp Products North America Inc., nor is it likely to lead to a superior proposal.”

Arko Corp. is painting a different picture.

Its letter, submitted Wednesday as a Form 8-K filing with the Securities and Exchange Commission (SEC), discloses a second amendment to Arko’s real estate funding agreement with private-equity firm Oak Street Capital in which Oak Street has agreed to provide for an additional $1.25 billion of capacity specifically to finance Arko’s acquisition of TA.

  • GPM is No. 6, 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.

In addition to the additional capacity provided by the amended agreement, Arko said it has “significant additional liquidity through cash, cash equivalents and availability under its existing credit lines” cover the nearly $1.4 billion cost of the deal.

“Arko has never required any financing conditions and has closed every acquisition it has put under contract,” the aggressive acquirer said in its letter. “Arko’s proposal to TravelCenters offers no financing-related conditions.”

TA’s board has refused to engage at all with Arko since Arko originally submitted it bid on March 14, the company said. Arko is offering $92 per share for TA, “a nearly 7% premium to the $86 per share price pursuant to TravelCenters’ existing merger agreement with BP Products North America Inc.,” the company said.

Arko also boosted its offer on Monday, it said, offering to pre-pay $202 million for 11 years of lease payments, using the same discount rate as BP’s proposal, in comparison to BP’s proposal to pre-pay $188 million for 10 years of lease payments.

“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,” Arko said in its letter. “Arko has retained financial and legal advisors for this transaction and believes this update merits immediate engagement by TravelCenters’ board, management and advisors.”

Richmond, Virginia-based Arko Corp., which owns 100% of GPM Investments, is one of the largest operators of convenience stores and wholesalers of fuel in the United States. GPM Investments owns and operates c-store brands including Fas Mart, Shore Stop, Scotchman, BreadBox, Young's, Li'l CricketNext Door Store, Village PantryApple MarketJiffi StopAdmiralRoadrunner MarketsJiffy Food MartsE-Z Mart1 StopTownStarr, ExpressStop and Handy Mart.

TA, a publicly traded, full-service travel center network based in Westlake, Ohio, has 280 locations in 44 states and Canada, principally under the TA, Petro Stopping Centers and TA Express brands.

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