NEW YORK – BJ’s Wholesale Club Inc. shareholder Leonard Green & Partners said it’s examining an offer for the U.S. membership warehouse chain, reviving its overtures after BJ’s began looking for suitors.
The two parties reached a confidentiality agreement on Monday as part of a possible transaction, according to a U.S. regulatory filing on Tuesday. Leonard Green agreed to provisions restricting it from purchasing additional BJ stock for a year.
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BJ’s in February said its board had decided to explore strategic options, including a possible sale. The company hired Morgan Stanley in November after receiving an offer from private-equity firm Leonard Green, three people with knowledge of the matter said at the time. The wholesale club has lagged behind larger competitor Costco Wholesale Corp. in same-store sales growth.
BJ’s has a “diverse” membership and has expanded the groceries it carries to attract more supermarket customers, Bob Drbul, an analyst at Barclays Capital, wrote in a March 2 note. He has an “overweight” rating on the stock.
“The company’s competitive advantage is its local dominance in many of the 15 states in which it operates” on the U.S. East Coast, New York-based Drbul said.
Earlier this month BJ’s of Westborough, Mass., forecast first-quarter profit of as much as 58 cents a share, exceeding analysts’ estimates, after it raised membership fees.
BJ’s shares have dropped 2.9 percent this year, giving the retailer a market value of $2.5 billion.
