By Svea Herbst-Bayliss
NEW YORK, May 7 (Reuters) - Recreational yacht retailer MarineMax is preparing to sell itself as one potential buyer recently raised its offer and at least one prominent private equity firm is conducting due diligence, three sources told Reuters.
MarineMax's board of directors agreed last month to proceed with a sale, allowing the process to move into a second round, said two of the sources, who were not permitted to talk about the private discussions. The board, including CEO
Brett McGill, made the decision some six months after investor Donerail Group began pushing for a sale or for a leadership change.
Donerail, which owns a 5% stake in MarineMax and proposed buying the company itself, has increased its initial offer, two of the sources said. Blackstone Group, which is already heavily invested in marinas and yacht services, has also expressed interest and is reviewing documents, the sources said.
A MarineMax representative did not immediately respond to a request for comment. A representative for Donerail could not be reached and Blackstone declined to comment.
Headquartered in Clearwater, Florida, MarineMax caters to a wealthy clientele through its 65 marinas and storage locations and 70 dealerships, with megayachts listed for sale on its website in the millions of dollars.
Three months ago, the company sent out confidentiality agreements allowing interested parties to review documents and receive other information to shape a potential bid.
Even as the pace of moving toward a sale is picking up, sources familiar with the process cautioned that a deal is not guaranteed.
MARINEMAX SHARES RISE 30% THIS YEAR
The stock price has climbed 30% this year as investors began pushing more forcefully for a sale. Appetite for high-end yachts has grown and the company has said it will buy back stock.
The marina business is a hot investment area as the Federal Reserve cut interest rates three times last year and consumer demand for boats appears to be rising, industry analysts said.
In the last five years, however, the company's stock price has tumbled, falling more than 50%.
DONERAIL RAISES INITIAL BID
Earlier this year, Donerail offered to pay $35 per share in an all-cash deal that would have valued the company at nearly $1 billion. Since then, Donerail has raised its offer, said two of the sources, who declined to elaborate.
MarineMax is working with Wells Fargo bankers while Donerail and its investment partners have retained Jefferies to pursue the takeover, Reuters previously reported.
Reuters also previously reported that recreational vehicle retail company Blue Compass, investor Island Capital Group and private equity group TPG had expressed interest.
(Reporting by Svea Herbst-Bayliss in New York; Editing by Matthew Lewis)
