FINDLAY, Ohio — A new report suggests this week could be a tipping point for the possible sale of the Speedway LLC chain of approximately 3,900 convenience stores. Several international companies are preparing to submit bids this week for the coveted U.S. prize of the third largest c-store chain in the United States.
Canadian convenience store operator Alimentation Couche-Tard Inc., Japanese c-store operator Seven & i Holdings Co. Ltd. and U.K.-based private equity firm TDR Capital are among those preparing to submit rival bids for Marathon Petroleum Corp.’s Speedway LLC retail network, Reuters reported on July 22, citing people familiar with the matter.
Murphy USA Inc., El Dorado, Ark., is also considering participating in the auction for Speedway, two of the sources said.
If Findlay, Ohio-based Marathon Petroleum does not secure a sale of Speedway, it will seek to spin it off to its shareholders. It is exploring a sale even as it moves ahead with the 2019 plan to spin the network off into an independent, publicly traded company.
The Speedway bidder roster covers many of the Top 10 chains. 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, with about 6,000 U.S. stores, is No. 2; Speedway is No. 3; Casey’s General Stores, Ankeny, Iowa (not among the reported bidders), with more than 2,200 c-stores, is No. 4; EG America, which has nearly 1,700 U.S. stores, is No. 5; and Murphy USA, with about 1,500 stations, is No. 6.
Richmond, Va.-based GPM Investments, with close to 1,300 stores, is No. 7. It is not reported to be among the bidders for Speedway. While it is an aggressive acquirer, its targets generally include small or midsized c-store chains; it is currently wrapping up a deal to acquire Dallas-based Empire Petroleum Partners LLC.
The bids so far
Earlier this month, contingent on a deal, Laval, Quebec-based Couche-Tard reportedly was preparing to divest 1,250 convenience stores to avoid antitrust concerns as a condition to allow it acquire Speedway.
Couche-Tard does not want to pay for the entire deal on its own, according to the sources. It is also seeking a partner that would take on some of the Speedway stations, the sources said. It is in talks to team up with private equity firms, including Cerberus Capital Management LP, New York, the sources added. It is seeking a partner that will take on at least 850 Speedway locations, according to one of the sources.
Couche-Tard has also explored partnering with TDR Capital, owner of Blackburn, U.K.-based c-store operator EG Group, the sources said. But Couche-Tard and TDR could not agree on how to split the Speedway assets, and TDR has now raised financing for an all-cash bid of its own, the sources said. TDR will not attach any antitrust contingencies on its bid, said the sources.
In March, Seven & i dropped a February bid to acquire Speedway for approximately $22 billion, citing the high price and the COVID-19 pandemic. Enon, Ohio-based Speedway could now fetch between $15 billion and $17 billion, amid lower traffic during the pandemic, the sources said.
In February, TDR Capital was said to be interested in merging Speedway with EG Group through a tax method known as a Reverse Morris Trust in a transaction that could be worth an estimated $26 billion, according to Bloomberg. In mid-July, TDR Capital reportedly was considering another bid for Speedway, possibly with a different partner, possibly Couche-Tard, people familiar with the matter told Bloomberg.
Reuters’ sources requested anonymity because the matter is confidential. All of the other companies either declined to comment or did not respond to the news agency’s inquiries.