Advising the pet retailer on its strategic review is JPMorganSecurities (JPM) and Wachtell Lipton Rosen & Katz.
"Notwithstanding our confidence in the Company's future prospects, following a detailed Board review of the Company over the last several months, including many constructive conversations with a wide range of shareholders, we have decided to explore options to maximize shareholder value, including a potential sale of the Company," said Gregory Josefowicz, PetSmart's chairman, in a statement.
The Phoenix-based company has been under pressure from activist investor Jana Partners since early July when the hedge fund revealed a 9.9% stake in a regulatory filing, saying that it intended to discuss alternatives with management including a sale.Jana has received backing from asset manager Longview Asset Management LLC, which not only supported the sale idea, but said that in some situations it might even consider rolling its 9% stake in the retailer into a leveraged buyout. Since that time, Jana has consistently been barking for an auction of PetSmart. On Monday, the hedge fund said, in a regulatory filing it had received an "anonymous, unsolicited package," that included business plans related to the company's third and fourth quarter results, plus a cover letter noting the company had "missed internal projections." Jana urged management to share the information with shareholders.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV