BJ’s Shareholders to Receive $51.25 Per Share in Cash Buyout
"Everyone, except me, will have the same boss” the day after the sale of BJ’s Wholesale Club, CEO Laura Sen told employees in an email Wednesday morning following the announcement of BJ’s proposed sale to private equity firms Leonard Green & Partners and CVC Capital Partners for $2.8 billion in cash. BJ’s published the email in an amended proxy statement filed Wednesday at SEC soon after the proposed sale was announced.
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The proposed sale, subject to shareholder and regulatory approvals, will likely be complete within three to four months when BJ’s will become a privately held company, Sen said in the email. BJ’s shareholders will receive $51.25 per share in cash for each share of BJ’s common stock they hold, 38 percent above the stock’s closing price on June 30, 2010, when LGP announced its 9.5 percent ownership stake in the company, and 6.5 percent higher than the stock’s closing price Tuesday. BJ’s stock closed $2.22 higher at $50.30 in Wednesday trading. Goldman Sachs, which last week upgraded BJs to a “conviction buy” with a $60 per share price target, downgraded the stock to “neutral” Wednesday afternoon, according to theflyonthewall.com.
The process of exploring “strategic alternatives” began last February when BJ’s board of directors announced that it had hired Morgan Stanley to help explore options, Cathy Maloney, vice president of investor relations told us. Leonard Green owns stakes in retailers including The Container Store, David’s Bridal, Equinox Fitness, Whole Foods, J. Crew, Neiman Marcus, Rite Aid, Sports Authority, Tourneau and Petco, according to the company website. CVC’s U.S.-based retail holdings include Leslie’s, a swimming pool supply company, and Pilot Flying.
For the first quarter ended April 30, BJ’s reported net income of $33.7 million on sales of $2.77 billion, up 10 percent from Q1 2010. Higher sales were driven largely by perishable and prepared foods, health and wellness and small appliances, the company said in its earnings report. Pre-recorded video and TVs were among the weaker categories, the company said.
BJ’s will file a preliminary proxy statement with the SEC containing detailed information about the transaction and independent committee process, it said.