Mergers & Acquisitions

Arko Emerges as bp’s Rival in Bid to Acquire TravelCenters of America

GPM parent urges TA’s board to ‘seriously consider’ bid of $92 per share, which ‘offers no financing-related conditions’
GPM
Photograph courtesy of GPM Investments

Arko Corp. has emerged as the rival bidder to bp Products North America Inc. to acquire TravelCenters of America Inc.

bp in February reached an agreement, subject to shareholder and regulatory approval, to purchase TA for $86 per share or $1.3 billion. On March 14, TA received an unsolicited, non-binding indication of interest from “Party G,” an unnamed publicly traded fuel supplier and convenience-store operator to purchase TA for $92 per share.

TA Board Chairman Adam Portnoy advised the TA board not to engage in negotiations with Party G—now known to be Richmond, Va.-based Arko Corp., parent company of convenience-store company GPM Investments LLC—in connection with a change of control of TA. Arko has issued a letter urging TA’s board to “seriously consider” Arko’s proposal to acquire TravelCenters and engage with, rather than exclude, Arko in the sale process.

  • BP is No. 7, GPM is No. 6 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.

It is reasonably apparent that Arko is Party G, it said in a filing with the U.S. Securities & Exchange Commission (SEC).

Following the submission of its March 14, 2023, proposal to acquire TA and requesting access to diligence materials and after reviewing the publicly available terms of the proposed transaction with bp, as well as TA’s preliminary proxy statement, “Arko believes the board’s decision regarding Arko’s proposal was incorrect and not in the best interests of TravelCenters’ stockholders,” Arko said. “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 per share to the value of bp’s offer, Arko said, adding nearly $100 million in additional value to TA’s stockholders. “The proposal maintains the discipline that Arko’s stockholders are accustomed to, and that is characteristic of Arko’s systematic growth strategy designed to increase cash flow and profitability,” it said. “TravelCenters’ board should seriously consider Arko’s strong financial position.”

It continued, “Arko is prepared to immediately commence confirmatory due diligence and quickly enter into an agreement and plan of merger along with the other ancillary arrangements on the same material terms as in the merger agreement with bp. As one of the most acquisitive operators of convenience stores in the United States, with 23 transactions completed since 2013 and one pending and expected to close in the second quarter of 2023, Arko has never required any financing conditions and has closed every acquisition it has put under contract. Arko’s proposal to TravelCenters offers no financing-related conditions.”

Arko said it “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 Corp., which owns 100% of GPM Investments, is one of the largest operators of convenience stores and wholesalers of fuel in the United States. Arko operates in four reportable segments: retail, wholesale, fleet fueling and GPM Petroleum, which sells and supplies fuel to its retail and wholesale sites. 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 Stop, TownStarr, ExpressStop and Handy Mart.

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