TravelCenters of America (NASDAQ:TA) stock is traveling north today, and for good reason. Reportedly, the company will be acquired by BP (NYSE:BP), though it’s not finalized yet. Still, the transaction will probably happen, and that’s potentially good news for TravelCenters.
Based in Ohio, TravelCenters of America operates a network of travel centers in the U.S. These are places where truckers and other highway travelers stop to get food, fuel and other necessities.
BP, meanwhile, is a British energy giant that has a “predominantly off-highway convenience and mobility business.” So, it makes sense BP would have an interest in TravelCenters’ complementary “strategically-located network of highway sites.”
Or, as BP CEO Bernard Looney put it, his company seeks to grow its “convenience and mobility footprint across the U.S.” Thus, BP is offering to buy out TravelCenters of America in a $1.3 billion deal.
Typically, buyout bids have a positive immediate impact on the shares of the acquisition target. So, let’s see how today’s financial traders are responding to the news.
What’s Happening With TA Stock?
TA stock rocketed 70% higher this morning, easily breaking above $80. This must be quite a joyous occasion for TravelCenters’ shareholders, as the stock pretty much went nowhere over the past 12 months.
Let’s not get ahead of ourselves, though. A condition of the acquisition is it must be approved by TravelCenters of America’s shareholders who own a majority of the company’s shares outstanding.
There are no guarantees this will happen. However, it seems very likely TravelCenters’ shareholders will approve the sale of the company to BP. Today’s price action in TA stock appears to reflect the shareholders’ desire to see this deal take place.
Also, the deal is subject to regulatory approval. This probably won’t be an issue, though. Since there aren’t any obvious obstacles, the parties involved are “targeting closing the acquisition by mid-year 2023.”
So, this could be a win-win for both companies and their stakeholders. BP will likely get to acquire TravelCenters’ network of highway sites, and TA stock’s breakout moment has finally arrived.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.