Service Properties Trust Completes Transaction with BP in Connection with BP’s Acquisition of TravelCenters of America Inc.
May 16 2023 - 4:15PM
Business Wire
SVC Received $379.3 Million in Cash
Minimum Annual Cash Rents for 176 Travel
Centers Set at $254 Million with 2% Annual Increases
Amended Leases Guaranteed by BP Corporation
North America Inc. (A3 / A- Ratings)
Service Properties Trust (Nasdaq: SVC) announced today that BP
p.l.c. (NYSE: BP) completed its acquisition of TravelCenters of
America Inc. on May 15, 2023, and the previously announced amended
lease terms between SVC and BP are now in effect. SVC received
$379.3 million in cash as part of the transaction, including $188.0
million in prepaid rent from BP, $101.9 million in merger
consideration for the 7.8% of the outstanding TA shares owned by
SVC, and $89.4 million for certain tradenames and trademarks
associated with TA’s business previously owned by SVC.
Annual minimum cash rents under the amended leases are $254.0
million, with annual 2% increases throughout the initial 10-year
term and the five 10-year extension options. BP will receive
monthly rent credits totaling $25.0 million per year over the
10-year initial term of the leases for the rent BP has prepaid. BP
is now SVC’s largest tenant, leasing 30% of SVC’s gross assets
based on SVC’s assets as of March 31, 2023, and the guarantor of
the leases, BP Corporation North America Inc., is rated A3 by
Moody’s and A- by S&P.
Todd Hargreaves, President and Chief Investment Officer of SVC,
made the following statement regarding today’s announcement:
“We believe that the closing of the
transaction will benefit SVC shareholders both from the $379.3
million in funds received and by the significantly increased credit
quality of our largest tenant, as the amended leases are now
guaranteed by an A3/A- rated subsidiary of BP p.l.c.”
About Service Properties Trust:
Service Properties Trust (Nasdaq: SVC) is a real estate
investment trust, or REIT, with over $11 billion invested in two
asset categories: hotels and service-focused retail net lease
properties. As of March 31, 2023, SVC owned 220 hotels with over
37,000 guest rooms throughout the United States and in Puerto Rico
and Canada, the majority of which are extended stay and select
service. As of March 31, 2023, SVC also owned 765 retail
service-focused net lease properties totaling over 13.3 million
square feet throughout United States. SVC is managed by The RMR
Group (Nasdaq: RMR), an alternative asset management company with
over $37 billion in assets under management as of March 31, 2023
and more than 35 years of institutional experience in buying,
selling, financing and operating commercial real estate. SVC is
headquartered in Newton, MA. For more information, visit
www.svcreit.com.
WARNING REGARDING FORWARD-LOOKING
STATEMENTS
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
and other securities laws. These forward-looking statements are
based upon SVC’s present intent, beliefs and expectations, but
these statements and the implications of these statements are not
guaranteed to occur and may not occur for various reasons, some of
which are beyond SVC’s control. For example, Mr. Hargreaves states
that SVC shareholders will benefit from the BP transaction;
however, SVC may not realize all of the benefits it currently
anticipates.
The information contained in SVC’s filings with the Securities
and Exchange Commission, including under the caption “Risk Factors”
in SVC’s periodic reports, or incorporated therein, identifies
other important factors that could cause differences from SVC’s
forward-looking statements. SVC’s filings with the SEC are
available on the SEC’s website at www.sec.gov.
You should not place undue reliance upon forward-looking
statements.
A Maryland Real Estate Investment Trust with
transferable shares of beneficial interest listed on the Nasdaq. No
shareholder, Trustee or officer is personally liable for any act or
obligation of the Trust.
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version on businesswire.com: https://www.businesswire.com/news/home/20230516005881/en/
Stephen Colbert, Director, Investor Relations (617) 231-3223
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