Mergers & Acquisitions

Private Equity Firm TDR Shows Renewed Interest in Speedway Bid

Company seeking partner to acquire retail network, says report
Photograph courtesy of Marathon Petroleum

LONDON — The race to acquire Marathon Petroleum Corp.’s Speedway c-store chain just got a lot more tangled. TDR Capital, a private equity firm connected to EG Group, is considering another bid for the Speedway convenience-store chain, possibly with a different partner, people familiar with the matter told Bloomberg.

London-based TDR Capital has more than $9.15 billion of committed capital. It invests in medium-sized businesses and partners with them to develop and grow their operations. The firm is reaching out to banks to see how much financing it could raise for a Speedway bid, said the report. Any offer would likely be in partnership with another suitor, the sources said, asking not to be identified because the information is private.

In February, TDR Capital, the owner of global c-store operator EG Group, Blackburn, U.K., was interested in merging Speedway with EG Group through a tax-efficient method known as a Reverse Morris Trust in a transaction that could be worth an estimated $26 billion, Bloomberg said.

Bloomberg also said that TDR Capital has held talks about potentially teaming up with Alimentation Couche-Tard Inc., currently considered the frontrunner to acquire Speedway.

Separately, Couche-Tard is reportedly preparing to divest 1,250 convenience stores to avoid antitrust concerns as a condition to acquire the retail network from Marathon Petroleum. Any divestment by Couche-Tard would be contingent on a deal to buy all of Enon, Ohio-based Speedway LLC’s 3,900 locations.

Laval, Quebec-based Couche-Tard’s U.S. and Canadian retail network consists of about 9,900 c-stores, approximately 6,000 in 48 U.S. states under the Circle K and Holiday Stationstores banners, and the rest in all 10 provinces in Canada under the Circle K and Couche-Tard banners.

Although Findlay, Ohio-based Marathon Petroleum is moving ahead with its 2019 plan to spin off Speedway into an independent, publicly traded company, it is also exploring a sale. Along with EG Group, it has attracted other major buyers, including Seven & i Holdings Co. Ltd., the Tokyo-based parent of 7-Eleven Inc., Irving, Texas.

In March, Seven & i dropped a bid to acquire Speedway for approximately $22 billion, citing the high price and the COVID-19 pandemic. 7-Eleven may still also be a contender, according to Chris Li, analyst with financial services company Desjardins Securities, Montreal.7-Eleven, with close to 9,400 stores, is No. 1 on CSP’s 2020 Top 202 ranking of U.S. c-store chains by size. Couche-Tard is No. 2; Speedway is No. 3; and EG America, with nearly 1,700 stores, is No. 5.

A mid-June report in the Wall Street Journal said Marathon Petroleum has returned to the negotiating table, this time with Couche-Tard. Couche-Tard would not comment on a deal.

Founded in 2001, EG Group is a gasoline forecourt and convenience-store operator with approximately 5,400 sites in the United Kingdom, Europe, the United States and Australia. It entered the U.S. c-store market in early 2018 as EG America LLC with the acquisition of Cincinnati-based Kroger’s 762 c-stores. It then picked up 226 Minit Mart stores from TravelCenters of America, Westlake, Ohio; 70 sites from Certified Oil, Columbus, Ohio; and 54 stores from Fastrac, Syracuse, N.Y. And in July, EG Group made its second-biggest acquisition: the 562 locations of Cumberland Farms. It completed that acquisition in late October and now has its headquarters in Westborough, Mass.

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