Auto parts supplier LKQ explores strategic options, including sale

Jan 26 (Reuters) - Auto parts supplier LKQ LKQ.O said on Monday its board is reviewing strategic alternatives, including a potential sale of the company, to enhance shareholder value.

LKQ has been facing pressure from activist investor Ananym Capital since October to sell parts of its business, stressing that there are interested buyers, and the proceeds could be used to buy back shares.

"We have initiated a formal review of strategic alternatives to identify the best path forward to unlock value that is not reflected in our current valuation," said board Chairman John Mendel.

LKQ shares were up about 1% in morning trading.

It said there was no certainty the review would lead to a transaction or any other strategic outcome, and that no deadline or fixed timetable has been set for completing the process.

The company also said it was still involved in its previously announced process to explore a potential sale of its specialty segment Keystone Automotive Operations. It offers replacement parts for cars and trucks, including bumpers, hoods and remanufactured wheels.

Ananym had urged the auto-parts supplier in October to sell its European business, pressing the point that keeping the European and North American businesses together makes little sense, according to a letter to LKQ's board that was seen by Reuters.

The investor had noted in the letter that the total return on stock in LKQ lagged its proxy peers by 33% over the last 12 months, by 113% over the last five years, and by 253% over the last decade.

LKQ in August announced the sale of its self-service segment to private-equity firm Pacific Avenue Capital Partners in a $410 million deal to simplify its portfolio.