Convenience store chain Pantry nearing deal to sell itself - WSJ
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Dec 17 (Reuters) - Convenience-store chain Pantry Inc is nearing a deal to sell itself through an auction, the Wall Street Journal reported, citing people familiar with the matter.
A winner could be announced within days, with bids for the company due last week, the Journal reported. (http://on.wsj.com/1sz5fCM)
Using a typical takeover premium, the company could be valued at more than $850 million, the newspaper reported.
Pantry, which has a market value of about $680 million, owns the Kangaroo Express chain of convenience stores. It also runs quick service restaurants at its stores.
More than half of the company's 1,518 stores are present in southeastern United States.
Like other convenience stores that make most of their money from fuel sales, Pantry has been facing rising competition from dollar stores, supermarkets, club stores and mass merchants, who have entered the fuel retailing market.
Cary, North Carolina-based Pantry's revenue declined 3.5 percent to $7.5 billion in the year ended Sept. 25, primarily due to a fall in fuel sales, which account for three quarters of total revenue.
Fuel sales were hurt in fiscal 2014 by weaker demand and a decline in the average sale price, the company said in a regulatory filing this month.
Volatile fuel prices have also hurt gas-station operators as they struggle to pass on fuel costs to customers.
Pantry's shares, which closed at $28.86 on Tuesday, have risen 135 percent since touching a 52-week low in February.
Representatives at the company did not immediately respond to a request for comment outside regular U.S. business hours.
(Reporting by Luke Koshi and Ramkumar Iyer in Bengaluru; Editing by Gopakumar Warrier and Saumyadeb Chakrabarty)
