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PetSmart may be for sale

On Behalf of | Aug 28, 2014 | Sales & Dissolutions |

PetSmart, the retail chain with locations in Michigan and around the country, announced on Aug. 19 that it would consider selling itself to placate pressure from investors. Longview Asset Management and Jana Partners, which own a combined 19 percent stake in the company, have been leading the call for a sale. PetSmart has said that it plans to cut costs and will realize the savings in the next fiscal year. The amount of the cuts and where the savings would come from were not disclosed.

After making the announcement, shares in the company were up 3.4 percent. PetSmart shares had dropped 4 percent in 2014, and the company had slashed its earnings outlook in May. It had cited increased competition and a generally challenging consumer market as reasons. However, the company did announce that second quarter revenues were up 1.4 percent while earnings were up 5.1 percent.

The company also announced that it would be acquiring Pet360, an online pet retailer. PetSmart reportedly paid $130 million for the company, which owns several websites. The move was done in the hopes of bolstering its online business. Along with a loyalty program and exclusive brands and services, improving online sales is said to be one of the company’s core goals.

Calls to start sale of business proceedings may be beneficial to shareholders as well as the owners of a company. By consulting with a business law attorney at the outset, management can strive to get maximum value for the business while also maximizing the benefits to shareholders. The attorney can work with accountants and other advisers to help structure the proposed transaction.

Source: MSN Money, “PetSmart to consider selling itself“, August 19, 2014

Source: MSN Money, “PetSmart to consider selling itself“, August 19, 2014


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