Arko says ‘riskless’ to TravelCenters’ holders for board to engage on proposal

ARKO Corp. (ARKO) issued a letter to TravelCenters of America’s (TA) board, setting forth additional details of ARKO’s financing in connection with its proposal to acquire TravelCenters, and again asking for TravelCenters’ engagement with ARKO in the sale process. The letter discloses a second amendment to ARKO’s Standby Real Estate Purchase, Designation and Lease Program agreement with Oak Street, a Division of Blue Owl Capital, in which Oak Street has agreed, subject to the terms contained in the Program Agreement, to provide for an additional $1.25B of capacity specifically to finance ARKO’s acquisition of TravelCenters. "In addition to the additional capacity provided by the amended Program Agreement, ARKO has significant additional liquidity through cash, cash equivalents, and availability under its existing credit lines. 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. TravelCenters’ Board has refused to engage at all with ARKO since ARKO originally submitted, on March 14, 2023, a superior proposal of $92 a share, a nearly 7% premium to the $86 per share price pursuant to TravelCenters’ existing merger agreement with BP Products North America Inc., a wholly owned indirect subsidiary of BP p.l.c. ARKO’s proposal was further improved on March 27, 2023, including ARKO’s willingness to pre-pay $202 million for 11 years of lease payments, using the same discount rate as BP’s proposal, in comparison to BP’s proposal to pre-pay $188 million for 10 years of lease payments. ARKO 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 has retained financial and legal advisors for this transaction and believes this update merits immediate engagement by TravelCenters’s Board, management, and advisors… ARKO’s track record, strong financial position, and confidence in obtaining financing for this transaction should be seriously considered by TravelCenters’ Board and management when assessing whether ARKO’s superior proposal is in the best interests of TravelCenters’ stockholders. 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," the company stated in a press release.