Jan 26 (Reuters) - Auto parts supplier LKQ said on Monday its board is reviewing strategic alternatives, including a potential sale of the company, to enhance shareholder value. LKQ has been facing
LKQ Considering Sale and Other Strategic Options to Boost Value
LKQ's Strategic Review Process
Jan 26 (Reuters) - Auto parts supplier LKQ said on Monday its board is reviewing strategic alternatives, including a potential sale of the company, to enhance shareholder value.
Pressure from Activist Investors
LKQ has been facing pressure from activist investor Ananym Capital since October to sell parts of its business, stressing that there are interested buyers, and that the proceeds could be used to buy back shares.
Current Business Segments
"We have initiated a formal review of strategic alternatives to identify the best path forward to unlock value that is not reflected in our current valuation," said board Chairman John Mendel.
Past Transactions and Future Outlook
The company said there was no certainty the review would lead to a transaction or any other strategic outcome, and that no deadline or fixed timetable has been set for completing the process.
LKQ also said it was still involved in its previously announced process to explore a potential sale of its specialty segment Keystone Automotive Industries. It offers replacement parts for cars and trucks, including bumpers, hoods and remanufactured wheels.
Ananym in October urged the auto-parts supplier to sell its European business, pressing the point that keeping the European and North American businesses together makes little sense, according to a letter to LKQ's board that was seen by Reuters.
The investor had noted in the letter that the total return on stock in LKQ lagged its proxy peers by 33% over the last 12 months, by 113% over the last five years, and by 253% over the last decade.
LKQ in August announced the sale of its self-service segment to private-equity firm Pacific Avenue Capital Partners for an enterprise value of $410 million, in order to simplify its portfolio.
(Reporting by Abhinav Parmar in Bengaluru; Editing by Shilpi Majumdar and Saumyadeb Chakrabarty)
