Cheshire-headquartered retailer Pets at Home could be on the brink of a buyout by private equity.
While market whispers are nothing new, this latest rumour sent shares upwards yesterday.
A company called Pug Bidco Ltd has been registered at the same London address as private equity firm BC Partners, which coincidentally also owns US pet retailer PetSmart.
Shares took a dive last year after a cautious trading update that highlighted worsening market conditions, but a steady recovery was accelerated on bid rumours which sent the shares up 7.7% to a high of 248.2p.
Pets has been owned by private equity before.
While the business was founded in Chester in 1991 by entrepreneur Anthony Preston, he sold to Bridgepoint Capital in for £230 million in July 2004. In 2010 KKR then for paid around £955 million for the business before floating it on the stock market in 2014.
As a bid to show confidence in the shares last year Pets at Home CEO Lyssa McGowan purchased a £100,000 block. The company had also sought to reassure shareholders by buying back its own stock last year.
The last set of results showed a 47% year-on-year rise in pre-tax profits to £51.1 million from £34.7 million on a revenue lift of £789.1m from £774.2m last year.
Pets at Home stopped short of a profit warning, but admitted that “modest” year-on-year growth warranted “revising earlier guidance”. It certainly won’t be as much as the £144 million, anticipated in August, a 9.1% increase.
To quote her outlook in full, McGowan said: “The first half of financial 2025 was characterised by a subdued market, against which we outperformed. The bulk of our investments and peak operational risk are behind us and our market leadership and well invested platform underpin our confidence in continued outperformance.”
At the time TheBusinessDesk.com said: “The market will like her putting her own money in at this stage. But none of this will serve to dampen speculation about a private equity raid in the near future.”
AJ Bell head of financial analysis Danni Hewson, 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.”