Walmart lately has been hunting for acquisitions in the US — sort of.
The world’s biggest retailer, which has failed to expand US sales over the past two years by following its strategy of organic growth, made a bid this spring to acquire BJ’s Wholesale Club for upwards of $3 billion, The Post has learned.
Walmart, however, failed to pursue BJ’s after the warehouse retailer rejected its offer of more than $55 a share in mid-April, according to sources.
Instead, BJ’s agreed in June to accept a substantially lower bid of $2.8 billion, or $51.25 a share, from private-equity firms Leonard Green & Partners and CVC Capital Partners.
Walmart and BJ’s declined to comment.
The bid from Walmart, whose US sales of $260 billion last year were virtually unchanged since 2008, “seemed like a serious offer, like they weren’t just kicking the tires,” according to one source.
Indeed, BJ’s revealed in last week’s proxy filing on the merger that its top execs and directors met with the bidder’s “president,” which may have referred to Bill Simon, president and operating chief of Walmart’s US stores.
Nevertheless, BJ’s said in its regulatory filing that “Party A,” as it called the unidentified retailer, told BJ’s execs that it wasn’t willing to make “significant divestitures” of overlapping stores in order to please regulators.
Despite an entrenched deal-making habit overseas, the firm has achieved domestic dominance without the help of major acquisitions.
Walmart did perform a review of antitrust concerns, according to the BJ’s filing. Still, questions linger about how serious it ever was with its approach. One source briefed on the talks left open the possibility that Walmart was simply “trying to sneak a look at the books” at BJ’s.
“The feeling was that BJ’s didn’t want to pull back the sheets for Walmart on something that might not actually happen,” the source said.
Indeed, a combo with Walmart’s Sam’s Club division would have drawn fierce regulatory scrutiny, as it would have resulted in a single competitor for Costco, the category leader.
“More often than not, a merger that reduces the number of significant competitors from three to two is a major antitrust problem,” said Chul Pak, an antitrust lawyer at Wilson Sonsini Goodrich & Rosati.
That’s because “it makes it easier for the No. 1 and the merged entity to coordinate activities on pricing, quality and innovation — even if there isn’t coordinated action, the loss of competition can harm consumers,” according to Pak. jkosman@nypost.com