PetSmart Inc. (PETM): Longview Asset Management Supports Jana Partners’ Plan

In a newly amended filing with the U.S. Securities and Exchange Commission, Longview Asset Management, managed by James A. Star, has disclosed a letter sent to the board of directors of PetSmart Inc. (NASDAQ:PETM). Longview is asking the board to consider exploring a sale of the company. According to the filing, Longview upped its stake in PetSmart Inc. (NASDAQ:PETM) to 8.93 million shares from around 8.40 million shares held previously. The new stake is equal to 9.0% of common stock shares.

PetSmart, Inc.

In the letter, Longview states that it is writing in response to a 13D filed by Barry Rosenstein’s Jana Partners earlier this month, asking the company’s board to consider, among other issues, “a review of strategic alternatives including exploring a sale” of the company.

“Now that Jana has raised the possibility of a sale and that prominent brokerage firms have suggested that PetSmart is “in play,” we believe the board should consider this path for two reasons. First, our research suggests that Petsmart is likely to be valued much more highly by private market participants than by its current public market investors. Second, we are concerned that fending off a prolonged activist campaign will distract company employees at all levels from their primary task of selling goods and services to PetSmart’s customers and erode business value,” Longview added.

Further, Longview states that it recommends the board to engage advisors for the purpose of exploring this and other strategic alternatives.

“Should the Board determine a sale transaction to be in the interests of all shareholders, Longview clients would consider, depending on the parties and terms involved, rolling part or all of their holdings should it prove necessary to consummate a transaction,” according to the letter.

Barry Rosenstein’s Jana Partners disclosed a new position in PetSmart, Inc. (NASDAQ:PETM), owning 9.82 million shares of the company (including options to purchase 4.73 million shares of common stock), which account for 9.9% of its outstanding stock.

PetSmart Inc. (NASDAQ:PETM) is a $6.7 billion market cap supplier of specialty products, services and solutions for the lifetime needs of pets in North America. On CNBC, the “Squawk on the Street” team talked about PetSmart, saying that the company has been in the new for a couple of days for a number of reasons, including Jana Partners’ new position and now Morgan Stanley upgraded the company to ‘equalweight.’

“There was a large short position in the stock and quite a few people believe that the thesis called for continued declines overall in the stock reflecting financial performance. Jana, for a while, shorted the stock, a seller then came in and bought it on a big selloff and built that 9.9% position, and there’s another activist adding to the voice to the chorus here saying capital return, capital return, and/or sale, and Morgan Stanley playing catchup here.”

Disclosure: none

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!