BJ's Wholesale Club is said to seek sale
Shares of BJ's Wholesale Club Inc. jumped this morning after published reports said the Natick warehouse shopping club may put itself up for sale.
The company has reportedly hired New York investment bank Morgan Stanley to conduct an auction of BJ's. Bloomberg News reported that BJ's management received an undisclosed offer to buy the firm from private equity firm Leonard Green & Partners, which has a portfolio of brand name retail chains.
BJ's declined to comment.
Leonard Green, which took a 9.5 percent stake in BJ's in July, could not be reached for comment this morning, In its July filing with the Securities and Exchange Commission Green said it believed BJ's shares were "undervalued" and that it planned to contact management to discuss options, including taking the company private or finding additional financing, potentially through mortgage financing or sale leaseback transactions.
Leonard Green also has investments in Whole Foods Markets Inc, Rite Aid Corp, and other retailers, including Petco.
As a distant third to rivals Sam's Club and Costco Wholesale Corp., BJ's has been the subject of buyout rumors for years. Retail analysts say the Natick chain is an attractive target because of the stability of its membership income, which accounts for roughly 80 percent of its operating income, strong cash flow, cash-rich balance sheet, and BJ's ownership of 34 percent of the stores.
BJ's stock was up around 10 percent to $46.44 in trading this morning.