Updated version 1-LKQ suspends strategic review; extends share repurchase plan

In the second paragraph, details about the share price movement, detailed information, and earnings data have been added.

Reuters, October 29 - LKQ Corporation (LKQ.O) said on Thursday it has paused its evaluation of strategic options, including a potential sale of its Specialty business unit.

The auto parts distributor's share price rose 4% in pre-market trading.

The Specialty business unit includes Keystone Automotive Operations, which distributes automotive and truck parts such as bumpers, hoods, and remanufactured wheels.

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

The company, headquartered in Antioch, Tennessee, said in January this year that its board had begun evaluating strategic options, including a possible sale (link). The company added that the evaluation of alternative options for the Specialty business unit has now been paused.

Activist investors are increasingly urging auto parts suppliers to divest slow-growing businesses and return cash to shareholders.

Earlier this year, industry peer Genuine Parts (GPC.N) said it would split (link) into two separate companies under pressure from Elliott Investment.

LKQ said on Thursday its board has extended its share repurchase program by two years to October 25, 2028, retaining the $1.5 billion amount authorized for buybacks under the current program.

Additionally, LKQ reported adjusted earnings per share of 50 cents for the third quarter. According to data compiled by London Stock Exchange Group (LSEG), analysts on average expected 56 cents. Quarterly revenue fell 5.1% year-on-year to $3.32 billion, below the estimated $3.36 billion.

Last week, the company withdrew (link) its annual earnings forecast, citing continued weakness in its European business, and appointed Salvatore Abbate to replace Justin Jude as CEO starting in December.

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