Seven & i, Couche-Tard, TDR to make offers for Speedway this week: sources

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(Reuters) – Canadian convenience store operator Alimentation Couche-Tard Inc (TO:ATDb), Japanese peer Seven & i Holdings Co (T:3382) and private equity firm TDR Capital are preparing to submit rival bids this week for Marathon Petroleum Corp’s (N:MPC) gas station network Speedway, according to people familiar with the matter.

It is Marathon’s second attempt this year to divest Speedway after negotiations with Seven & i, parent of the 7-Eleven convenience store chain, over a $20 billion-plus deal collapsed in March as the novel coronavirus spread in the United States. Speedway could now fetch between $15 billion and $17 billion, amid lower road traffic during the pandemic, the sources said.

Couche-Tard, which has more than 9,400 stores in North America, does not want to pay for the entire deal on its own, according to the sources. It is also seeking a partner that would take on some of the Speedway gas stations and address potential antitrust concerns about a deal, the sources said.

The Laval, Quebec-based company is in talks to team up with private equity firms, including Cerberus Capital Management LP, the sources added. It is seeking a partner that will take on at least 850 Speedway locations, according to one of the sources.

Couche-Tard has also explored partnering with TDR Capital, owner of the British petrol station operator EG Group, the sources said. But Couche-Tard and TDR could not agree on how to split the Speedway assets, and TDR has now raised financing for an all-cash bid of its own, the sources said. TDR will not attach any antitrust contingencies on its bid, the sources said.

7‑Eleven operates and franchises more than 70,000 stores in 17 countries, including 11,800 in North America. It is not clear whether its Japanese parent is lining up transactions to address potential antitrust concerns.

Other smaller companies and buyout firms are in talks about partnering with a larger player on a bid. Murphy USA Inc (N:MUSA), which operates more than 1,400 convenience stores in 26 U.S. states, is considering participating in the auction for Speedway, two of the sources said.

The sources requested anonymity because the matter is confidential. Marathon Petroleum, Couche-Tard, TDR Capital and Cerberus declined to comment. Seven & i and Murphy USA did not respond to requests for comment.

If Marathon does not secure a sale of Speedway, it will seek to spin it off to its shareholders. Under pressure from hedge fund Elliott Management Corp, the Findlay, Ohio-based company has said the spin-off would happen by the first quarter of 2021. Speedway comprises more than 3,900 convenience stores.