On April 17, ARKO Corp. sent a letter to the board of directors of TravelCenters of America Inc. (TA) addressing potential concerns the board may have in correlation with ARKO’s bid to acquire TA.
Previously, ARKO had sent a letter to TA’s board offering $92 a share for 100% of the company, rivaling bp’s bid of $86 per share. ARKO requested that TA engage with them and not exclude them from the sale process. At the end of March, ARKO was revealed to be the competitor to bp in this matter, when previously it was unclear to the public who made the competing bid.
Following, TA made clear its intent to move forward with bp’s bid, which was unanimously approved by the TA board of directors.
ARKO then issued another letter setting forth additional details of its financing in connection with its proposal to acquire TA. ARKO’s proposal included an additional $1.25 billion of capacity specifically to finance the potential acquisition. ARKO also highlighted its additional liquidity through cash, cash equivalents and availability under its existing credit lines.
On April 3, TA announced it filed its definitive proxy statement with the Security and Exchange Commission (SEC), where bp would acquire all of the outstanding shares of TA common stock. The total equity value of the transaction would be approximately $1.3 billion.
In this most recent letter from ARKO, the chain acknowledged the April 3 news. ARKO noted that it continues “to be surprised and disappointed that TravelCenters has failed to engage at all with ARKO” on its various proposals.
“It is surprising that to date neither TravelCenters nor its financial and legal advisors have contacted us directly to ask any clarifying questions when it would be in the best interest of all TravelCenters’ shareholders to engage in our proposal at $92 per share in cash compared to bp’s proposal of $86 per share in cash,” the letter stated.
ARKO stated that it will enter into a binding policy with a U.S. insurance provider with an investment grade credit rating (A / A3) at its own cost that is prepared to fully insure the lease payments pertaining to TA’s obligation to Service Properties Trust over the 11-year lease term. ARKO also reiterated its lease prepayment proposal of $202 million of upfront lease payments in cash compared to bp’s $188 million.
The letter also addressed additional concerns and ended with the note that ARKO is available to meet with TA at any time.