BJ's is seeking more

EXCLUSIVE

BJ's Wholesale Club wants a sweetened offer of $55 a share -- or nearly $3 billion -- from a pair of buyout firms that are looking to take it private, sources told The Post.

As reported by The Post last week, the warehouse retailer has received a joint bid of $50 a share from Leonard Green & Partners and CVC Capital Partners -- a price that surprised some Wall Street analysts who were looking for a bid closer to what BJ's has now demanded.

BJ's told the private-equity firms yesterday, following a Tuesday board meeting, that it wasn't closing the door on talks, sources said. But BJ's was "not thrilled" with the $50-a-share offer, and pushed the bidders to raise it, according to one source.

Leonard Green and CVC are "very reluctant to go there," and "it now looks less likely there will be a deal," according to one source close to the buyout shops, referring to the $55 price tag.

Nevertheless, the source noted that the pair of private-equity shops were "still meeting" late yesterday and that "talks are not off yet." According to one source briefed on the talks, BJ's might accept a more modest bump-up that could amount to as little as "a dollar or two."

Likewise, Leonard Green and CVC might still allow some flexibility to sweeten their offer by a similar amount, according to one source. Last week, however, the buyout firms had signaled that their $50-a-share bid was a "final" offer, according to one person close to the process.

In a research note this week, Janney Montgomery Scott analyst David Strasser said $52 a share would represent "fair value" for a BJ's buyout, noting that the figure would amount to seven times the company's Ebitda, or earnings before interest, taxes, depreciation and amortization.

"We continue to believe that BJ's Wholesale going private makes sense due to the potential for a national store rollout," Strasser added, noting that the company has 180 stores in just 15 states, vs. rivals Costco and Sam's Club, which operate bigger chains that span 40 and 48 states, respectively.

BJ's shares, which have risen more than 19 percent in the past year as Leonard Green pushed BJ's to put the company on the block, inched up 17 cents yesterday, to $47.27 a share.

Los Angeles-based Leonard Green announced the joint bid with CVC Partners in a public filing last week -- confirming a June 7 report in The Post that the two planned to team up. While the buyout shops made their binding bid only a few days ago, they may have gone public sooner to pressure the company's board.

Indeed, insiders speculated that hedge funds -- including Steve Cohen's SAC Capital, the second-biggest BJ's shareholder -- might be pressuring the retailer to sell. jkosman@nypost.com

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