TravelCenters of America Inc. has entered into a merger agreement with BP p.l.c., in which BP will acquire all of the outstanding shares of TA common stock for $86 per share in cash. The sale price represents an 84% premium to the average trading price of the 30 days ending Feb. 15 of $46.68. The total equity value is approximately $1.3 billion.
“Today’s announcement that BP is acquiring TA for $86 per share is a result of the successful implementation of our turnaround and strategic plans,” said Jonathan M. Pertchik, TA’s CEO. “We have improved our core travel center business, expanded our network, launched eTA to prepare for the future of alternative fuels and improved our operating and financial results, none of which we could have accomplished without the hard work and dedication of our employees at every level.”
Today’s announcement is the culmination of a comprehensive process by TA’s Board, the company explained. Following the implementation of TA’s turnaround plan and several quarters of improved operating performance, TA received unsolicited interest to be acquired, TA said. In response, TA’s board hired financial and legal advisors as part of a formal process to consider a potential sale of the company. This process ultimately included competitive rounds of bidding from potential buyers that resulted in the merger with BP.
A condition of the sale is the approval by shareholders who own a majority of TA’s shares outstanding. Service Properties Trust (Nasdaq: SVC), which owns 7.8% of TA’s shares outstanding, and The RMR Group (Nasdaq: RMR), which owns 4.1% of TA’s shares outstanding, both have agreed to vote their shares in favor of the sale. At the closing of the transaction, TA will terminate its management agreement with RMR pursuant to the terms of the agreement and pay a termination fee to RMR that is currently estimated to be approximately $44 million. Subject to shareholder and regulatory approval, the parties are targeting closing the acquisition by mid-year 2023, TA said.
The transaction was unanimously approved by the TA Board of Directors. Citigroup acted as the exclusive financial advisor to TA and Ropes & Gray as TA’s legal advisor in connection with the transaction.
