PetSmart, Inc. (PETM), a $6.9 billion market cap company, confirmed Tuesday that it is considering putting itself up for sale.
The pet supply retailer, which has been pressured to sell itself by several shareholders, led by investment firm Longview Asset Management and activist investor Jana Partners, said that it will weigh “strategic alternatives” after a months-long review by the company’s board of directors.
“Notwithstanding our confidence in the company’s future prospects, following a detailed board review of the company over the last several months, including many constructive conversations with a wide range of shareholders, we have decided to explore options to maximize shareholder value, including a potential sale of the company”, PetSmart Chairman Gregory Josefowicz said in a statement.
The disclosure comes after hedge fund Jana Partners revealed that it had acquired a nearly 10% stake in the company and was pushing for a sale.
PetSmart also said it plans to launch a cost-reduction program that will target all areas of business. It said it will provide more details next quarter. As for the quarter ended Aug. 3, the company posted a profit of 98 cents a share, beating Wall Street estimates by 5 cents. Net income increased 5 percent from a year ago to $98 million.
Shares of PetSmart rose more than 5 percent on the acknowledgment of a potential takeover, and closed up 1.8 percent to $69.70 on Tuesday. Ticker is up another 3.30% in premarket hours.