NEW YORK (The Deal) -- Under pressure from a former executive in Carl Icahn's world, TravelCenters of America (TA) may soon be on the road to raising as much as $400 million by selling its real estate and leasing it back.
The possible move comes after activist RDG Capital Fund Management's Russell Glass said last week that he was "pleased" that the operator of travel rest areas was considering the "monetization" of its remaining company-owned real estate. TravelCenters did not return calls seeking comment.
Glass, who was one of Icahn's top executives before establishing his own fund in 2005, said he recently had a "constructive dialogue" with TravelCenters' CEO Tom O'Brien and other board members.
According to people familiar with the situation, "monetization" for Glass involves having TravelCenters conduct a significant sale-leaseback of its remaining company-owned facilities, stores and gas stations. The fund manager suggested in a May 1 letter that such a move could generate more than $400 million and "unlock" what he believes to be the fair value of the company at $24 to $27 a share -- considerably above the stock's current sub-$17 level. According to the company's March annual report, TravelCenters owns 37 truck stops and 27 convenience store/gas stations.
As for the proceeds, Glass wants to see the company pay down debt and acquire and develop new locations, according to a person familiar with the situation. TravelCenters, based in Westlake, Ohio, has debt that becomes redeemable in January 2016.