Proxy adviser ISS backs TravelCenters' proposed $1.3 bln deal with BP
28/04/2023 17:41
By Abigail Summerville
NEW YORK, April 28 (Reuters) - Shareholder advisory firm
Institutional Shareholder Services Inc (ISS) urged investors in
TravelCenters of America Inc TA.O to vote for the company’s
planned $1.3 billion sale to BP Plc BP.L , saying it "presents
higher certainty of completion."
In March, convenience store operator Arko Corp ARKO.O
submitted an unsolicited rival bid worth $1.4 billion, or $92
per share, for TravelCenters. TravelCenters has so far rebuffed
Arko's advances, saying the deal had a high level of execution
risk due to the latter's inability to secure committed
financing.
Service Properties Trust SVC.O , which owns most of
TravelCenters' properties, has also raised concerns about Arko's
sub-investment grade credit rating.
In a report on Friday, ISS supported TravelCenters' decision
to stick with the proposed deal with oil major BP.
“The downside risk of BP walking away and Arko not being
able to complete a deal likely is significant, and TA appears to
have raised some legitimate concerns about Arko's financing
commitments,” ISS said in the note, which was seen by Reuters.
Arko, TA and BP did not immediately respond to requests for
comment.
Shareholders of TravelCenters will vote on May 10 on whether
to approve the proposed deal with BP.
In February, BP agreed to buy TravelCenters for $1.3
billion. The BP offer of $86 per share represented an 84%
premium to the 30-day average trading price for the period ended
Feb. 15.
TravelCenters owns a network of about 281 highway sites
across 44 U.S. states and offers services beyond fueling,
including truck maintenance, restaurants, travel stores and
parking.
TravelCenters shares were down 0.1% at $86.11 on Friday
afternoon.
(Reporting by Abigail Summerville in New York
Editing by Anirban Sen and Matthew Lewis)
((abigail.summerville@thomsonreuters.com;))