Pets at Home jumps on Betaville takeover speculation

(Sharecast News) - Pets at Home surged on Wednesday after markets blog Betaville suggested the company was at the centre of takeover rumours. Betaville said that people following the situation had heard rumours Pets at Home may have attracted takeover interest, possibly from a private equity firm.

Some people suggested the private equity firm may be based in Europe but have a similar business in the US.

Financial News pointed to the fact that "Pug Bidco Limited" and a series of related companies were registered with Companies House on 24 February.

It said the bidcos share an address with BC Partners - 40 Portman Square - and their director shares a name with BC Partners' New York-based co-head of healthcare Michael Chang.

BC Partners is the owner of US pet retailer PetSmart; Chang is involved in that investment according to his profile on the private equity firm's website.

A person close to BC Partners told Financial News that it was not true the bidcos were targeted at Pets at Home.

The shares closed up 7.8% at 248.40p, having hit as high as 270p earlier in the session.

Danni Hewson, head of financial analysis at AJ Bell, said: "Is there any bite to match all the barking that's propelled Pets at Home to the top of the FTSE 250 gainers? Shares in the company hit a three-month high after markets blog Betaville reported on rumours that the company had attracted the attention of private equity.

"Post-pandemic the company's share price was riding high, with plenty of new pet owners prepared to splash out on expensive food, toys and even outfits to spoil their new family members. But the cost-of-living crisis put consumers under pressure and, along with many retailers, Pets at Home found this past 'golden quarter' was looking a little tarnished as in-store sales were soft even if the vet business was proving resilient.

"It's this kind of softening that can provide an opportunity for an investor to bag a bargain, especially if they've already got knowledge of the sector.

"Though there remain questions over whether this is more than just a shaggy dog story and if the coming days will shed light rather than fur."