Activist investor Jana Partners LLC is looking to turn up the heat on pet products retailer PetSmart Inc. (PETM) , as private equity firms KKR & Co. LP (KKR) and Clayton, Dubilier & Rice LLC are apparently preparing a joint offer.
Jana, a hedge fund holding a 9.8% stake in the Phoenix, Ariz.-based retailer, is pressing PetSmart to sell the business.
The activist has lined up nominees for PetSmart's board in the event of a proxy contest, according to a 13D filed with the Securities and Exchange Commission on Thursday evening.
Those nominees include Edwin Crawford, previously a chairman of pharmacy operator CVS Caremark Inc.; Julian Day, former chairman and CEO of electronics retailer RadioShack Corp.; Thomas Dickson, former CEO of Harris Teeter Supermarkets Inc.; Susan Feldman, co-founder of online furniture retailer One Kings Lane; and Lawrence Jackson, formerly president and CEO of global procurement for discount department store operator Wal-Mart Stores Inc.
Jana may also reserve the right to field a candidate from the firm, totaling six nominees, enough to control a 10-member board if it were to fully succeed in a proxy contest.
Jana would propose the slate if the retailer does not complete its strategic review to Jana's satisfaction, a source said.
The filing was made as both KKR and Clayton, Dubilier & Rice have been conducting due diligence, people familiar with the matter confirmed. These people added that a bid could come within the next two weeks.