Trading Ideas Following The Long, Arduous Buyout Of BJ's

Following months upon months of rumors and conflicting reports, it seems as if BJ's Wholesale Club BJ has finally reached a buyout deal with Leonard Green & Partners and CVC for $51.25 per share in cash. The total value will be approximately $2.8 billion.

According to Seeking Alpha, BJ's Board of Directors unanimously approved the merger agreement and recommended that all shareholders vote in favor of the deal.

Thomas Shields, the lead director and Chairman of the independent committee, was quoted as saying, “We are very pleased to announce a transaction that provides our shareholders with excellent value and the certainty of a significant cash premium for their shares. Todays announcement is the result of a comprehensive process in which an independent committee of our Board, with the assistance of its outside financial advisor, thoroughly explored and carefully considered alternatives to enhance value for our shareholders. In connection with this process, CVC and LGP made a definitive offer to acquire BJs, and this offer was fully negotiated by the Company. BJs Board of Directors believes that this transaction maximizes value and is in the best interests of our shareholders, employees and members.”

Nothing is official until the shareholders give their approval, but the whole thing is expected to finally come to a close during the fourth quarter of this year. The deal has been called, by the Wall Street Journal, the “longest sale process ever”. Now that it's coming to an end, however, one has to wonder where Leonard Green & Partners and CVC will look next.

99 Cents Only Stores NDN
While BJ's was twiddling its thumbs for such a long time, Leonard Green went away and did buyouts of J. Crew and Jo-Ann Stores, and it attempted a deal for NDN. Now that the BJ deal is pretty much tied up, will Leonard Green move in on NDN once again?

Family Dollar Stores FDO
Following the news of the BJ deal, FDO shares started to inch up to 0.4 percent. According to FDO, June same-store sales in the first four weeks are consistent with its fourth-quarter projection of sales rising 5% to 7%.

Dollar General DG
In the past year, DG stock has hit a 52-week low of $26.61 and a 52-week high of $35.09. It'll be interesting to see what happens here in the wake of the BJ deal, it surely represents a gamble.

Wal-Mart WMT and Costco Wholesale COST
BJ's trails both Costco and Wal-Mart's Sam's Club in sales, so a few sniffs in their direction are surely inevitable.