Zacks_Analysts' Blog : Deal Completed, BJ's Delisted - Analyst Blog

BJ’s Wholesale Club Inc. (BJ) recently announced the completion of its buyout by Leonard Green & Partners and CVC Capital Partners for $2.8 billion. Following the announcement, the shares of the company got delisted today from the New York Stock Exchange.

Earlier, the majority of its shareholders approved the offer of Leonard Green & Partners and CVC Capital Partners for making the company private. The company stated that approximately 72% of its shareholders approved the deal, while a meager 0.4% voted against it.

In June 2011, the board of directors approved the buyout offer. The $2.8 billion cash deal offers BJ’s shareholders $51.25 for each share of the company’s common stock.

The news of the buyout first hit the streets following the recommendation given by the committee of autonomous directors in February 2011. BJ's announced that it is looking for strategic choices, which might include a possible sale of the company.

BJ’s has a healthy balance sheet with modest debt along with a business opportunity in a sturdy food and grocery market that is gaining ground.

Moreover, BJ’s continued investments in Club payroll and Club remodels facilitate the company to augment the sales of perishable items, which have been the driving factor, and have helped in increasing sales, improving traffic counts and gaining market share.

Further, as a warehouse club, BJ’s is uniquely positioned to drive traffic as it provides wider assortments of brands at compelling prices and offers its customers the choice of bulk or consumer-friendly package sizes.

Prior to delisting, BJ’s which faces intense competition from Costco Wholesale Corporation (COST) and Sam’s Club, a division of Wal-Mart Stores Inc. (WMT) maintained a long-term Neutral’ recommendation.