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PE Firm's Stake in Bed Bath & Beyond May Spur Board Into Talks

5/29/15 1:48 PM EDT
For about a year, industry watchers have pegged Bed Bath & Beyond (BBBY) as a potential buyout target. Such a deal may have seemed a bit far-fetched, until now. Private equity firm Leonard Green recently revealed in a regulatory filing that it had accumulated nearly 1 million shares in the Union, N.J.-based retailer. The shares were only worth about $70 million as of Wednesday afternoon when Bed Bath & Beyond’s stock closed above $71 a share and constitutes a roughly 0.6% stake. But while small, the stake speaks loudly about the PE firm’s intentions. Leonard Green generally doesn’t invest in publicly traded companies, according to an industry source. Instead, the firm sticks to full-on leveraged buyouts. By taking a small stake in Bed Bath & Beyond, Leonard Green is suggesting to the home goods retailer’s board that it is serious about buying the business. Amassing a stake, as Leonard Green has done, can sometimes get the board to the bargaining table. The move could also be a signal for activists to get involved and nudge the potential target into talks.
Stocks in this video: BBBY
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