Petco Said to Seek Final Bids by November as Buyout Firms Circle

  • KKR, CVC, Apollo, Hellman & Friedman said to plan final offers
  • Firms said eligible to team up after meetings this week

Bids for Petco Animal Supplies Inc. are due next month, and at least four private-equity firms are planning to make offers, people with knowledge of the matter said.

A Petco store in Clark, New Jersey.

Ron Antonelli/Bloomberg

Buyout firms KKR & Co., CVC Capital Partners, Apollo Global Management and Hellman & Friedman are in talks with Petco’s owners about a possible takeover and will make presentations to management this week, said the people, who asked not to be identified because the information is private. The retailer of pet food and canine costumes could be valued at about $3 billion, people familiar with the situation have said.

While the potential buyers are restricted from teaming up ahead of this week’s meetings, they could pursue joint bids after that point, the people said. Hellman & Friedman and CVC are each open to partnering with another firm, the people said.

The pet-supplies retailer, taken private by Leonard Green & Partners and TPG in a $1.8 billion leveraged buyout in 2006, hired investment bankers earlier this year to explore options for selling or taking the company public, people familiar with the matter have said. Petco filed in August with the U.S. Securities and Exchange Commission for an initial public offering, with a $100 million placeholder amount.

No decision on a sale has been made, and the company may decide to proceed with an IPO, according to the people with knowledge of the latest developments.

TPG and San Diego-based Petco declined to comment, while a spokesman for Leonard Green didn’t respond to a request for comment. A spokesman for CVC declined to comment, while representatives of KKR, Apollo and Hellman & Friedman didn’t respond to messages seeking comment.

PetSmart Inc., the closely held pet-supplies company bought by private-equity firm BC Partners in March, held preliminary talks with Petco about an acquisition, people familiar with the matter said in September. A tie-up between the two biggest pet-store chains in the U.S. would face antitrust scrutiny, among other challenges, the people said then.

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