(Bloomberg) — EQT AB is considering a counterbid for German online pet supply retailer Zooplus AG in a potential challenge to the 2.8 billion-euro ($3.3 billion) offer from rival buyout firm Hellman & Friedman, people with knowledge of the matter said.
EQT has been studying a potential purchase of Munich-based Zooplus, the people said, asking not to be identified because the information is private. Deliberations are ongoing, and there’s no certainty they will lead to a formal proposal, the people said.
In August, Hellman & Friedman offered to buy Zooplus for 390 euros per share in cash in a deal backed by the company’s management and supervisory boards. Shareholders holding 17% of Zooplus, including Maxburg Beteiligungen GmbH, have committed to tender their stock, Hellman & Friedman said in a statement at the time.
Zooplus stock closed Wednesday at 397 euros, indicating investors may expect a higher offer to emerge. The company’s shares jumped as much as 4.7% in Thursday trading, hitting a record high, and were up 4.4% to 414.40 euros at 1:55 p.m. in Frankfurt.
A representative for EQT declined to comment, while a spokesperson for Zooplus couldn’t immediately be reached for comment.
Bidding Wars
The buyout firms’ interest in the booming market for pet supplies comes as more people stuck at home during coronavirus lockdowns seek out furry companions. The industry was already benefitting as dog and cat owners look for more premium products and the convenience of online deliveries.
Private equity funds have increasingly been bidding against each other, driving up prices for assets as they rush to spend their records amount of capital. In some cases, they’ve decided to partner for acquisitions after initially pursuing separate offers.
Apollo Global Management Inc. is considering teaming up with Fortress Investment Group on its bid for British grocer Wm Morrison Supermarkets Plc as they seek to compete with a rival offer from Clayton Dubilier & Rice. Last year, Blackstone Inc. joined together with Global Infrastructure Partners to acquire Signature Aviation Plc, an operator of private jet bases.
This year is already on track to be EQT’s busiest ever for acquisitions, with $28.1 billion of transactions announced so far in 2021, according to data compiled by Bloomberg. It has been making bets on online shopping, agreeing in June to acquire a majority stake in U.K. e-commerce shipping platform Parcel2Go.
EQT has also done deals in the pet industry before, building up a chain of veterinary care practices under the IVC Evidensia moniker through a series of acquisitions in recent years.
(Updates with share movement, background from fifth paragraph)
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