Business

BJ’s eyes big-buck$ bank to stall takeover

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Shopping memberships may not be the only thing that’s private at BJ’s Wholesale Club.

The members-only warehouse retailer is close to hiring an adviser to explore strategic alternatives, including a possible sale to a private-equity firm, The Post has learned.

Lead candidates include Goldman Sachs and Morgan Stanley.

While an auction could fetch as much as $3 billion, sources said management of the Natick, Mass., retail chain has dragged its feet since July, when Los Angeles buyout firm Leonard Green Partners began courting BJ’s after disclosing a 9.5 percent stake.

“Frankly, I think management is worried about losing their jobs if they sell,” said one source close to the retailer, speculating that a private-equity shop would “clean house” by firing current management at BJ’s in a turnaround bid.

While BJ’s has improved its operations during the past few years, the chain’s profitability still lags that of bigger rival Costco.

Yesterday, BJ’s shares closed at $42.03, down from the 52-week high of $47.51 reached in July.

Leonard Green — which has made big investments in retail chains like Whole Foods, Petco and Sports Authority — has long coveted BJ’s for its real estate and balance sheet, and is seen as the most likely buyer.

While Leonard Green doesn’t typically go hostile on its targets, one source close to the situation said a “fight” broke out last month as the firm grew impatient with the retailer’s dawdling.

Indeed, BJ’s hired boutique investment bank Greenhill & Co. this summer, and appeared to be weighing a sale of the company before “going silent,” according to a banking source.

In private talks last month, Leonard Green pressured BJ’s to say yea or nay to a possible takeover. Following that confrontation, BJ’s recently interviewed several bulge-bracket banks, including Goldman Sachs and Morgan Stanley, sources said.

A Morgan Stanley spokeswoman declined to comment. A Goldman spokeswoman didn’t immediately respond to a request for comment.

While BJ’s mulls an auction of the company, sources said it’s also considering buying back shares.

A BJ’s spokeswoman declined to comment, while Greenhill officials couldn’t be reached for comment. A Morgan Stanley spokesman also declined to comment.

With its healthy balance sheet and steady cash flow, private-equity sources say BJ’s is among the most attractive targets in the retail sector.

Still, a buyer might have to pony up as much as $850 million in equity to get a deal done.

“There’s always a chance this could end up like RadioShack,” said one banker, referring to this summer’s failed auction of the electronics retailer that was led by Goldman.

james.covert@nypost.com