"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.