Buyout bid ends for Lumber Liquidators

Lumber Liquidators Holdings Inc.’s founder said he has decided not to pursue a buyout of his former company. The shares sank.

Tom Sullivan had been working on a deal, including talking to banks and private-equity firms, but the stock price had gotten too high and the company had declined to engage in discussions, he said Friday in an interview. Sullivan has sold some of his shares, and will continue to monitor the situation, he said.

“Unless there is major change in the board and management, I’m sure there will be another opportunity for us,” he said.

Lumber Liquidators, which sells hardwood flooring and other home-renovation products, fell as much as 16 percent to $9.43 Friday, the biggest intraday decline in more than a month.

Before Sullivan disclosed a large stake in the company on Aug. 20, Lumber Liquidators had declined 15 percent this year. The shares steadily gained to being up as much as 37 percent as recently as Tuesday, but have now pared much of that gain.

Sullivan, who started the chain that now has about 400 locations, built a stake of 7.7 percent as he pursued a bid for the company that he said had been poorly managed. He had described the executive team and board as “pathetic,” criticizing their spending on a new headquarters, marketing strategy and bonus system for store employees.

The share sale made Sullivan millions of dollars, according to Bloomberg calculations.