Pets at Home share price rises amid takeover rumours
It comes alongside positive news for Pets at Home in regards to the Competition and Markets Authority’s investigation into the veterinary sector
Pets at Home has seen its share price rise over 17% today (26 February) amid rumours that private equity firm BC Partners is preparing a bid, according to reports from City AM.
A series of bidcos were registered on 24 February with pug in the name sparking speculation that they could be used to target the retailer.
One in particular, Pug Bidco, lists Michael Chang as a director, a man of the same name is partner, private equity (North America) at BC Partners.
The bidco’s registered address is 40 Portman Square, London, which is the address of BC Partner’s London office.
Chang was part of the team that took the US pet supplies retailer Petsmart private in 2015 and bolted on the Chewy pet-food website in 2017.
It comes alongside positive news for Pets at Home in regards to the Competition and Markets Authority’s investigation into the veterinary sector.
Analysts from Jefferies have suggested that changes are “likely to be largely limited to improved transparency and regulation”, and reported increased confidence price controls will not be implemented.
The CMA’s probe has been looking into the industry following concerns pet owners are not getting value for money.
This included concerns that owners were being overcharged for medicine, as well as fear that consolidation by larger practices may reduce competition in the market.
The most recent published papers on the probe, released by the CMA on 6 February, noted concerns that customers had a limited choice of services and said that the price of vet services has risen faster than inflation.
However, Jefferies analysts noted that profit margins in the sector are “largely unchanged,” adding that the CMA is unlikely to implement broad pricing control measures.
Jefferies stated: “Our expert is optimistic about the outlook for the sector, believing that the trading headwinds are ‘transient’ and that, once the overhang of the CMA investigation is cleared, the industry will have much greater clarity on how it can progress and be profitable.”
Pets at Home declined to comment when approached by Pet Gazette.
