Leonard Green Mulls BJ's Buyout Bid

By Retail FOXBusiness

BJ’s Wholesale (BJ) and private equity firm Leonard Green have entered into a confidentiality pact that could lead to a buyout of the No. 3 U.S. wholesale club operator.

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The pact was revealed in a new regulatory filing by Los Angeles-based Leonard Green, which has already invested in consumer companies such as the Sports Authority, Neiman Marcus and Rite Aid (RAD).

According to the Securities and Exchange Commission filing, Leonard Green entered into a confidentially pact on March 21 with BJ’s, which agreed to provide certain confidential data on its business and properties.

Leonard Green said in the SEC filing it is evaluating a potential acquisition of BJ’s and has agreed to a restricted ability to acquire more shares of the company before March 21. The private equity firm also said it has beneficial ownership of 9.3% of BJ’s voting stock.

BJ’s, which trails rivals Costco (COST) and Wal-Mart’s (WMT) Sam’s Club, announced plans to explore a sale in February. It retained Morgan Stanley (MS) to help it weigh its strategic options.

Shareholders cheered the Leonard Green news, bidding BJ’s stock 3.18% higher to $48.00. in Tuesday’s premarkets. The stock had been almost 3% in the red for 2011 as of Monday’s close.

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