Leonard Green firm evaluating BJ’s takeover

RT Analysis: Warehouse chain an attractive buy

NEW YORK -- Leonard Green & Partners continues to seek investments in retail, this time setting its sights on BJ's Wholesale Club. Information on Tuesday confirmed that the private equity firm is considering an offer to acquire the warehouse club chain.

Leonard Green, which already as a 9.3% ownership stake in the wholesale club operator, said in an SEC filing that it is examining confidential information provided by BJ's as it evaluates an offer.

BJ's revealed in February that it was considering selling itself.

BJ's recent fourth-quarter performance shows why it is an attractive buy. The company reported that net sales for its fourth quarter ended Jan. 29, were $2.9 billion, an increase of 7.4% over the prior-year period. Same-store sales increased by 3.8%. Excluding fuel, comps were up 1.7%. Excluding a post-tax expense of $41.1 million, adjusted non-GAAP net income was $51.3 million, or 95 cents per diluted share. BJ’s EPS results were above Citi Investment Research’s estimate of 92 cents, analyst Deborah Weinswig reported. 

Leonard Green recently bid $1.3 billion to acquire 99 Cents Only and $1.6 billion for Jo-Ann Stores. It was also part of a group that acquired J. Crew for $3 billion.

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