Big Lots (BIG) tumbled Thursday as shareholders stress over a new report indicating the discount retailer has decided to take itself off the auction block.
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According to The Wall Street Journal, Big Lots decided not to sell itself due to differences over valuation with two groups of private-equity firms: Bain Capital and TPG Capital, and Thomas H. Lee Partners and Advent International.Big Lots failed to receive a bid in the range it was seeking because the PE firms expressed worries about the company’s growth prospects as the economy recovers, the paper reported.
Some shareholders dumped the stock in response, sending it dropping 9.12% to $34.30 in Thursday’s premarkets. The stock had rallied nearly 24% on the year as of Wednesday’s close amid enthusiasm for a possible leveraged buyout.
Wall Street had hoped Big Lots would be taken private in a deal in the mid-$40s and some analysts predicted even more bullish valuations.
Big Lots had reportedly hired Goldman Sachs (GS) to explore a sale.
Rival BJ’s Wholesale (BJ), which has also reportedly been the subject of takeover talk, saw its shares slip in early trading.