Two groups of private equity-led bidders are expected to each bid more than US$4 billion for Petco Holdings, according to reports.
One of the groups is with KKR & Co. and Hellman & Friedman, and the other is with CVC Capital Partners and the Canada Pension Plan Investment Board. Reports say Apollo Global Management by itself is also among the bidders. Binding offers are due November 25, 2015.
In August 2015, Petco filed for an initial public offering of stock that could value it at US$5 billion to US$6 billion, including debt. And, in early October, the company said it would go public again after nine years of private ownership. But now, Petco’s private equity owners are expected to sell the company instead of following through on the IPO.
In late 2014, Petco rival PetSmart Inc. was bought by a private equity consortium led by BC Partners Ltd. for US$8.7 billion.
In September 2015, PetSmart said it was exploring the possibility of acquiring Petco. But, in October 2015, merger talks between the two companies were reported to have stalled because of disagreements over antitrust risks. The two companies also explored a merger possibility in 2014, but PetSmart ruled out a deal with Petco in favor of the buyout by BC Partners.