Southland Corp., the world's largest convenience-store operator, yesterday announced that its founding family plans to buy the company's publicly held stock for about $5.1 billion.

Southland, which operates 7-Eleven, High's Dairy and other convenience-store chains, has been rumored for months to be a possible takeover target.

To ward off being taken over by another company, Southland's board of directors unanimously approved one of the largest leveraged buyouts ever, with the founding family offering to pay $77 a share for about two-thirds of the company's 41 million outstanding common shares -- a steep premium over the $68.50 per share price the stock closed at on Thursday when it last traded on the New York Stock Exchange.

In addition, the family plans to buy all of Southland's preferred stock at $90.27 a share, also up sharply from the $81 Thursday close.

"We believe {this offer} provides a very attractive opportunity for shareholders to realize the value of their ownership in Southland," company Chairman John P. Thompson said in a statement. Thompson and his brothers -- Jere W. Thompson, Southland's president, and Joe C. Thompson Jr. -- have formed JT Acquisitions to buy Southland. They are the sons of company founder Joe C. Thompson Sr., who began the chain 61 years ago as an icehouse in Dallas. The family owns about 10 percent of Southland's outstanding stock.

Today, the company has grown to 8,222 convenience stores -- two-thirds owned by the company, the rest franchised -- with revenues totaling $8.6 billion and profits $200.4 million last year.

In a leveraged buyout, assets of the company being acquired are used by the buyers as collateral to finance the purchase. Some assets usually are sold off to reduce the debt resulting from the takeover.

The leveraged buyout came as no surprise to financial analysts who monitor the company.

"The company has been rumored as a takeover target ever since October of last year," said Edward Gagnon, a financial analyst with the Dallas investment firm Rausher Pierce Refsnes. Although the rumors could never be pinned down, Wall Street speculation frequently centered on oil companies seeking to buy the chain to merge the convenience-store operations with their gasoline stations.

Last month, Washington's Haft family had been rumored to be acquiring shares in the company with an eye to buying Southland. However, the Hafts -- who usually refuse to comment on reports that they are interested in acquiring a particular company -- denied they were buying Southland stock.

Nonetheless, Southland's stock continued to be volatile, climbing $8.875 in one day in mid-June amid rumors of a possible takeover.

At that time, Southland issued a statement saying it knew of no reason why the stock was climbing, but nevertheless said it was reviewing "its financial and strategic alternatives," a sign Wall Street usually interprets as meaning the company is weighing a leveraged buyout.

"It has been clear that the management has always wanted to retain control of the company," Gagnon said.

In addition to its convenience stores, Southland owns Chief Auto Parts, Southland Distribution Center, Southland Dairies and other light manufacturing and food-processing operations. It also owns 50 percent of Citgo Petroleum Corp., having sold the other 50 percent last year.

Last year, with steep competition from other convenience-store chains and a hard-hit economy in Texas and the Midwest, Southland's profits dropped 5.7 percent from the year before. That decline made Southland a more vulnerable takeover target as its stock prices dropped, noted Fred E. Wintzer Jr., a financial analyst with Alex. Brown & Sons Inc.

"The company was worth more dead than alive," he said, largely because of the valuable real-estate assets the company has in its stores.

At $77 a share, the offer "is an attractive price," said Gagnon. "If there are other parties {interested in buying Southland}, they will have to show their interests real soon -- as early as this week," he added.

About 48 million shares of Southland common stock are outstanding. After the first 31.5 million shares are purchased for cash, the remaining shares will be converted into another security that gives the owner the right to receive $61.32 in cash and $15.68 in a new issue of exchangeable preferred stock.

The offer is set to begin today and expires at the end of the month.