PetSmart (PETM) Stock Price Jumps After BC Partners Says It Will Buy Pet Retailer For $8.7B

Shares of PetSmart Inc., North America's largest pet retailer, jumped more than 4 percent Monday in premarket trading after the company said it agreed to be acquired by a group led by London-based private equity firm BC Partners Inc. The transaction is valued at nearly $8.7 billion.

The consortium led by BC Partners said Sunday it agreed to acquire PetSmart for $83 per share, a premium of nearly 39 percent over PetSmart’s closing share price on July 2, the day before activist investor Jana Partners began urging PetSmart to seek a sale. The consortium includes institutional investor La Caisse de dépôt et placement du Québec, StepStone and Longview Asset Management, which owns or manages around 9 percent of PetSmart’s outstanding shares.

The deal is subject to regulatory approvals, and the transaction is expected to close in the first half of 2015.

PetSmart operates 1,387 stores across the U.S., Canada and Puerto Rico. Its shares rose 4.73 percent to $81.34 in premarket trading on Monday.