PetCo Sold

[Steven Pro]

From http://news.yahoo.com/s/ap/20060714/ap_on_bi_ge/petco_buyout

Petco agrees to $1.66 billion buyout

NEW YORK - Petco Animal Supplies Inc., the nation's second biggest pet supplies retail chain, said Friday that it has agreed to be acquired for about $1.66 billion by a private investment group.

The investors Leonard Green & Partners LP and Texas Pacific Group are paying $29 per share in cash for Petco, a 45 percent premium over its closing price of $19.45 on Thursday on the Nasdaq Stock Market.

Petco shares climbed $8.55, or 44 percent, to $28 in premarket trading.

The buyers would also assume debt that Petco said would boost the total value of the deal to $1.8 billion.

Petco said its board unanimously approved the proposed deal. The transaction is expected to close by this year's fourth quarter, pending shareholder and regulatory approval.

Petco, which is second only to PetSmart Inc. among the nation's biggest pet supply retailers, is the latest retailer to be taken out by private equity investors in recent months, who are drawn to retailers' strong cash flows and real estate assets.

Blackstone Group and Bain Capital agreed to acquire arts and crafts retailer Michaels Stores Inc. for $6 billion in June. Texas Pacific Group and another private equity player Warburg Pincus teamed up in 2005 to purchase luxury department store chain Neiman Marcus Group Inc. for $5.1 billion.

 

[Travis L. Stevens]

I wonder what they are going to do to and with the stores. Are they going to improve? Or demolish?

 

[Reefeross]

Could be good...But it could mean a whole new batch of people who have no idea what the animals really need...And don't care.

 

[raider77]

I believe it's going to stay the same. Nobody's going to know the difference. Same neglect of animals and of customers.

 

[ziggy222]

my girlfriend quit there after a month because of the hostile work environment,but most of all because of the ill care of the fish.she hated selling fish that were gonna die and scooping out all the dead fish from the tanks every day.oh well,its not like they even paid her a fair wage anyway.

 

[billsreef]

Those same two investment groups bought/bailed out Petco once before when they were previously a publicly held company. A number of years ago thier stock was doing well based on "foward looking statements", untill the 4th quarter report came out and the stock nose dived from about $30/share to about $5/share in two days time. Of course the top dogs in the company had sold large numbers of shares shortly before that 4th quarter reportwas released. Subsequently they stated that they felt the stock market did not fairly value the pet industry and arranged for Leonard Green & Partners LP and Texas Pacific Group to privatize the company. Naturally allegations of insider trading had been made, and several lawsuits brought about by investors. A couple of years after the dust settled, they issued an IPO and went back on the stock market again. Now I see the same investment groups are buying them off the stock market again. What it means, I don't know.