Giles Clarke, chief executive of PetsMart in the UK, is battling against rival chain Pets At Home to win back control of the business he sold to the Americans for pounds 150m two years ago. Now it is understood he may also seek to win control of Pets At Home if his offer for the former Pet City business succeeds.
While there is room in the market for two out-of-town pet retailers, experts believe there would be significant cost savings if the two were merged.
The stumbling block would be that Pets At Home is a family-controlled business that is unlikely to want to sell. It is run by Anthony Preston, who founded the company in 1991. However, the venture capital group 3i has a 20 per cent stake and may be seeking an exit after a stock market flotation of the business was postponed last year.
Pets at Home and the management of PetsMart UK are thought to be offering pounds 10m to pounds 15m for the retail group, which has struggled since the Americans took control. Some venture capitalists think it may be worth as little as pounds 8m.
The Americans are thought keen to sell and may tie in an announcement with its full-year results next Tuesday. It is expected to report full- year profits of $21.7m (pounds 13m) on sales of $2.1bn.
There may be problems with the competition authorities if Pets At Home and PetsMart link. They would control about 60 per cent of Britain's pet products market and 40 per cent of pet sales. Small, independent shops would be sure to complain.