Gordon Haskett’s head of event-driven research Don Bilson notes that Genuine Parts (GPC) CEO Will Stengel was asked on the company’s Q1 call yesterday if the company would ever consider an underperforming competitor as an acquisition target and Bilson contends that the question posed by Bank of America’s Elizabeth Suzuki "was aimed in AAP‘s direction." Stengel said, "The answer is yes. We’re going to do deals that create values that align with our strategy, regardless of how they’re performing," but Stengel also offered the caveat that "We’re going to be really disciplined on whether they’re a good business or a challenged business." Bilson concluded by stating: "Quite frankly, we’re not sure [Advance Auto Parts] would even be a match for GPC, but it sounded to us yesterday like one sell-sider has been giving this idea some thought, which makes sense given AAP’s lingering problems and the fact that it has a succession question that needs answering."
Published first on TheFly
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