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Advance Auto Tumbles on Report Deal Talks Falter

Advance Auto Parts Inc. (AAP), the retailer said to be exploring a sale, fell the most in more than six months after the New York Post reported that deal talks with private-equity firms have sputtered.

The shares tumbled 5.3 percent to $73.93 at the close in New York, for the biggest one-day drop since May 17. The stock had gained 10 percent this month through yesterday, after the company on Nov. 2 was said to be working with Blackstone Group LP (BX) on strategic options including a sale, according to a person with knowledge of the matter who declined to be named.

While the seller of car batteries and motor oil had been talking to several investment firms, only KKR & Co. remains in the running, the Post said today. The Roanoke, Virginia-based company, with more than 3,700 stores, had been seeking a sale price of as much as $6 billion, the newspaper said.

The auction, now in its second round, has “fizzled out,” the Post reported, citing a source close to the process that it didn’t identify. The sales process was “ambitious” because a buyer would need to pay more than seven times earnings before interest, taxes, depreciation and amortization, a measure known as Ebitda, the newspaper said, citing another unnamed source.

Advance Auto reported Ebitda of $840.6 million in 2011, according to data compiled by Bloomberg.

“We do not comment on rumors and/or speculation,” Shelly Whitaker, an Advance Auto spokeswoman, said in an e-mail.

Kristi Huller, a KKR spokeswoman, declined to comment on the Post report.

To contact the reporter on this story: Niamh Ring in New York at nring@bloomberg.net

To contact the editor responsible for this story: Kevin Miller at kmiller@bloomberg.net

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