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LKQ halts strategic review; extends share buyback program

By Reuters News

Oct 29 (Reuters) - LKQ LKQ.O said on Thursday it had suspended a review of strategic alternatives, including a potential sale of its Specialty segment.

Shares of the automotive parts distributor gained 4% in premarket trading.

The Specialty segment includes Keystone Automotive Operations, which distributes car and truck parts such as bumpers, hoods and remanufactured wheels.

LKQ has faced pressure from activist investor Ananym Capital since last year to divest its European business and use the proceeds to buy back shares.

The Antioch, Tennessee-based company said in January that its board had initiated a review of strategic alternatives, including a potential sale. It added that a previous review exploring alternatives for the Specialty segment had been suspended.

Activist investors have increasingly pushed auto parts suppliers to divest slower-growing businesses and return cash to shareholders.

Earlier this year, peer Genuine Parts GPC.N said it would split into two after pressure from Elliott Investment.

LKQ's board extended its share repurchase program by two years through October 25, 2028, retaining $1.5 billion available for buybacks under the current authorization, the company said on Thursday.

Separately, LKQ reported third-quarter adjusted profit of 50 cents per share. Analysts on average expected 56 cents, according to data compiled by LSEG. Quarterly revenue fell 5.1% to $3.32 billion from a year earlier, below an estimated $3.36 billion.

The company withdrew its annual forecast last week, citing continued weakness in its European operations, and named Salvatore Abbate to succeed Justin Jude as CEO from December.

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