BC Partners, along with several limited partners including StepStone and Canadian pension manager La Caisse, said in a release on Sunday that it would acquire the chain of stores for $83 a share, a 39% premium to PetSmart's stock price on July 2, 2014. Activist investor Jana Partners disclosed a 9.8% stake on July 3 and urged the company to seek a sale.
The deal is expected to close in the first half of 2015.
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PetSmart shares were up 4.2% to $80.92 at last check. Here's what analysts said.
David Schick, Stifel (Hold)
PETM clearly held a deliberate and thorough bidding process given the announced strategic review and breadth of media reports on a potential sale. Longview has 9% of shares and is committed to the current transaction. The consortium is financed and there's little risk to the 1H15 close in our view. We do not expect, given the thoroughness, that it is likely for another bidder to emerge. We don't expect PETM to remain on the previously disclosed cost cut plan, but a private PETM and PETC is good for others in the industry. We'd expect both to maintain a rational pricing environment. We would not be surprised by a merger with PETC at some point as PETM indicates smaller specialty players are taking share (we think Pet Supplies Plus and Pet Valu, among others). Bigger picture, this acquisition is a noteworthy change for the retail sector after a somewhat low success rate in recent years (e.g. BBY, BKS, and AAP).