Private Equity Firm Mulls BJ’s Buyout

BJ’s Wholesale Club and private equity firm Leonard Green & Partners have entered into a confidentiality agreement related to a possible buyout, according to an SEC filing. The filing is a necessary preliminary step toward a buyout, but doesn’t guarantee that it will actually take place.

In accordance with the filing, Westborough, Mass.-based BJ’s has agreed to furnish the private equity firm with “certain confidential information concerning the business and properties.”

In July 2010, Los Angeles-based Leonard Green, which recently bought out retailers Jo-Ann Stores and J Crew, reported a 9.5 percent stake in BJ’s through stock and options.

Financial website Seeking Alpha speculated that based on the peer valuation, BJ’s could be worth $60 to $80 per share in a buyout “While the upper range may be difficult to achieve, since Costco Wholesale deserves a premium valuation, even a buyout in the lower part of the range would offer a nice return from BJ’s current price,” Seeking Alpha noted.

BJ’s operates 190 clubs in 15 states.