The Scoop
Used auto-parts giant LKQ is near a settlement deal with activist investor Ancora that would give the hedge fund seats on the company’s board, according to people familiar with the matter.
The $10 billion company is also expected to announce as soon as Thursday that it’s forming a special committee of independent directors to find ways to increase the company’s stock price, including considering a sale, the people said.
The activist owns about 2.5% of LKQ and has been talking privately with the company’s executives, the people said. LKQ makes money in the US by salvaging used cars for parts, and sells new car parts in Europe.
LKQ hired Goldman Sachs and Wachtell Lipton to contend with the activist. This isn’t the first time that an investor has sought to shake things up at the company. ValueAct took a stake in the company back in 2019 and sought operational improvements before exiting that position in 2023 at a profit.
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Shares of LKQ, which competes with companies like Advance Auto Part and O’Reilly’s, are down 37% from its 2022 highs.
Ancora has made a name for itself running activist campaigns at mostly industrial companies. It is currently agitating at US Steel for board change and to stop a proposed acquisition by Nippon Steel. It’s also run campaigns at Norfolk Southern, the $57 billion railroad, and at CH Robinson, a freight company.