Filing Details

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.     )*

 

 

Big Lots, Inc.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

089302103

(CUSIP Number)

Mill Road Capital III, L.P.

Attn: Thomas E. Lynch

382 Greenwich Avenue

Suite One

Greenwich, CT 06830

203-987-3500

With a copy to:

Peter M. Rosenblum, Esq.

Foley Hoag LLP

155 Seaport Blvd.

Boston, MA 02210

617-832-1151

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

March 7, 2022

(Date of Event which Requires Filing of this Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ☐

 

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are sent.

 

 

 

*	The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

CUSIP No. 089302103		13D		Page 2 of 10 Pages

 

1.		Names of Reporting Persons.   Mill Road Capital III, L.P.
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  ☐        (b)  ☐
3.		SEC Use Only
4.		Source of Funds (See Instructions)   WC
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)   ☐
6.		Citizenship or Place of Organization   Cayman Islands
Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   1,462,851
				8.		Shared Voting Power
				9.		Sole Dispositive Power   1,462,851
				10.		Shared Dispositive Power
11.		Aggregate Amount Beneficially Owned by Each Reporting Person   1,462,851
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   ☐
13.		Percent of Class Represented by Amount in Row (11)   5.1%
14.		Type of Reporting Person (See Instructions)   PN

CUSIP No. 089302103		13D		Page 3 of 10 Pages

 

1.		Names of Reporting Persons   Mill Road Capital III GP LLC
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  ☐        (b)  ☐
3.		SEC Use Only
4.		Source of Funds (See Instructions)   AF
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)   ☐
6.		Citizenship or Place of Organization   Cayman Islands
Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   1,462,851
				8.		Shared Voting Power
				9.		Sole Dispositive Power   1,462,851
				10.		Shared Dispositive Power
11.		Aggregate Amount Beneficially Owned by Each Reporting Person   1,462,851
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   ☐
13.		Percent of Class Represented by Amount in Row (11)   5.1%
14.		Type of Reporting Person (See Instructions)   OO

CUSIP No. 089302103		13D		Page 4 of 10 Pages

 

1.		Names of Reporting Persons.   Thomas E. Lynch
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  ☐        (b)  ☐
3.		SEC Use Only
4.		Source of Funds (See Instructions)   AF
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)   ☐
6.		Citizenship or Place of Organization   USA
Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power
				8.		Shared Voting Power   1,462,851
				9.		Sole Dispositive Power
				10.		Shared Dispositive Power   1,462,851
11.		Aggregate Amount Beneficially Owned by Each Reporting Person   1,462,851
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   ☐
13.		Percent of Class Represented by Amount in Row (11)   5.1%
14.		Type of Reporting Person (See Instructions)   IN

CUSIP No. 089302103				Page 5 of 10 Pages

 

Item 1.

Security and Issuer

This joint statement on Schedule 13D relates to the common stock, par value $0.01 per share (the Common Stock), of Big Lots, Inc., an Ohio corporation (the Issuer). The address of the Issuers principal executive offices is 4900 E. Dublin-Granville Road, Columbus, Ohio 43081.

 

Item 2.

Identity and Background

(a)    This joint statement on Schedule 13D is being filed by Thomas E. Lynch, Mill Road Capital III GP LLC, a Cayman Islands limited liability company (the GP), and Mill Road Capital III, L.P., a Cayman Islands exempted limited partnership (the Fund). Each of the foregoing is referred to in this Schedule 13D as a Reporting Person and, collectively, as the Reporting Persons. Mr. Lynch, Justin C. Jacobs and Eric Yanagi are the management committee directors of the GP and, in this capacity, are referred to in this Schedule 13D as the Managers. The GP is the sole general partner of the Fund. Mr. Lynch has shared authority to vote and dispose of the shares of Common Stock reported in this Schedule 13D.

The Reporting Persons have entered into a Joint Filing Agreement dated March 15, 2022, a copy of which is filed as Exhibit 1 to this Schedule 13D, pursuant to which they have agreed to file this Schedule 13D jointly in accordance with Rule 13d-1(k) under the Exchange Act.

(b)    The business address of Mr. Lynch, and the address of the principal business and the principal office of the GP and the Fund, is 382 Greenwich Avenue, Suite One, Greenwich, CT 06830. The business address of Mr. Jacobs is 7448 NE 4th Court, Miami, FL 33138. The business address of Mr. Yanagi is 400 Oyster Point Blvd, Suite 526, South San Francisco, CA 94080.

(c)    The principal business of the GP is acting as the sole general partner of the Fund. The principal business of the Fund is investing in securities. The present principal occupation or employment of each Manager is as a management committee director of the GP and of Mill Road Capital Management LLC, a Delaware limited liability company (the Management Company), which provides advisory and administrative services to the GP and is located at 382 Greenwich Avenue, Suite One, Greenwich, CT 06830.

(d)    None of the Managers, the GP and the Fund has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e)    None of the Managers, the GP and the Fund was, during the last five years, a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or final order (1) enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or (2) finding any violation with respect to such laws.

(f)    Each Manager is a citizen of the United States.

CUSIP No. 089302103				Page 6 of 10 Pages

 

Item 3.

Source and Amount of Funds or Other Consideration

The Reporting Persons acquired beneficial ownership of an aggregate of 1,462,851 shares of Common Stock for $29,402,530.35 using working capital from the Fund and the proceeds of margin loans under margin loan facilities maintained in the ordinary course of business by the Fund with a broker on customary terms and conditions.

 

Item 4.

Purpose of Transaction

The Reporting Persons acquired shares of the Common Stock based on their belief that the Common Stock represents an attractive investment opportunity. The following information may be deemed pertinent.

On March 15, 2022, the Management Company issued a letter to the shareholders of the Issuer (the Shareholder Letter) expressing praise for the Issuers management team and its successful implementation of a strategic plan, and encouraging the Issuers board of directors to engage a financial advisor and pursue a sale process. The Management Company believes a sale process could maximize value for the Issuers shareholders at an assumed purchase price of $55-$70 per share, which represents a premium of 72%-119% over the closing price of the Common Stock on March 14, 2022 of $31.99. The Shareholder Letter is attached hereto as Exhibit 3 and incorporated herein by reference.

The Reporting Persons intend to review continuously their equity interest in the Issuer. Depending upon their evaluation of the factors described below, one or more of the Reporting Persons may from time to time purchase additional securities of the Issuer, dispose of all or a portion of the securities then held by such Reporting Persons, or cease buying or selling such securities; any such additional purchases or sales of securities of the Issuer may be in the open market, in privately negotiated transactions or otherwise.

The Reporting Persons may wish to engage in a constructive dialogue with officers, directors and other representatives of the Issuer, as well as the Issuers shareholders; topics of discussion may include, but are not limited to, the Issuers markets, operations, competitors, prospects, strategy, personnel, directors, ownership and capitalization. The Reporting Persons may also enter into confidentiality or similar agreements with the Issuer and, subject to such an agreement or otherwise, exchange information with the Issuer. The factors that the Reporting Persons may consider in evaluating their equity interest in the Issuers business include the following: (i) the Issuers business and prospects; (ii) the performance of the Common Stock and the availability of the Common Stock for purchase at particular price levels; (iii) the availability and nature of opportunities to dispose of the Reporting Persons interests; (iv) general economic conditions; (v) stock market conditions; (vi) other business and investment opportunities available to the Reporting Persons; and (vii) other plans and requirements of the Reporting Persons.

Depending on their assessment of the foregoing factors, the Reporting Persons may, from time to time, modify their present intention as stated in this Item 4.

The Reporting Persons intend to continuously review their options but, except as set forth above, do not have at this time any other specific plans that would result in (a) the acquisition of additional securities of the Issuer or the disposition of securities of the Issuer; (b) any extraordinary corporate transactions such as a merger, reorganization or liquidation involving the Issuer or any of its subsidiaries; (c) any sale or transfer of a material amount of the assets of the Issuer or of any of its subsidiaries; (d) any change in the present management or Board of Directors of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the Issuers Board of Directors; (e) any material

CUSIP No. 089302103				Page 7 of 10 Pages

 

change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuers business or corporate structure; (g) any change in the Issuers charter or by-laws that may impede the acquisition of control of the Issuer by any person; (h) the Issuers Common Stock being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system or a registered national securities association; (i) causing a class of equity securities of the Issuer to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (j) any action similar to those enumerated above.

 

Item 5.

Interest in Securities of the Issuer

(a, b)    The percentages of beneficial ownership reported in this Item 5, and on each Reporting Persons cover page to this Schedule 13D, are based on a total of 28,467,377 shares of Common Stock issued and outstanding, consisting of (i) 30,540,270 shares of Common Stock issued and outstanding as of December 3, 2021, as reported in the Issuers quarterly report on Form 10-Q for the fiscal quarter ended October 30, 2021, less (ii) 2,072,893 shares of Common Stock repurchased by the Issuer between December 8, 2021 and January 29, 2022, as described in the earnings release of the Issuer dated March 3, 2022 attached as Exhibit 99.1 to the Issuers current report on Form 8-K filed with the SEC on March 7, 2022. All of the share numbers reported below, and on each Reporting Persons cover page to this Schedule 13D, are as of March 15, 2022, unless otherwise indicated. The cover page to this Schedule 13D for each Reporting Person is incorporated by reference in its entirety into this Item 5(a, b).

The Fund directly holds, and thus has sole voting and dispositive power over, 1,462,851 shares of Common Stock. The GP, as sole general partner of the Fund, also has sole authority to vote (or direct the vote of), and to dispose (or direct the disposal) of, these shares on behalf of the Fund, and Mr. Lynch has shared authority to vote (or direct the vote of), and to dispose (or direct the disposal) of, these shares on behalf of the GP. Accordingly, each of the Reporting Persons beneficially owns 1,462,851 shares of Common Stock, or approximately 5.1% of the outstanding shares of Common Stock, and the Reporting Persons beneficially own, in the aggregate, 1,462,851 shares of Common Stock, or approximately 5.1% of the outstanding shares of Common Stock.

(c)    No Reporting Person, other than the Fund as set forth in the table below and as described in Item 6, effected any transaction in shares of the Common Stock from January 14, 2022 (the date 60 days prior to the filing of this Schedule 13D) to March 15, 2022:

 

Date of Purchase / Sale		Shares Purchased / (Sold) (#)				Purchase / Sale Price per Share ($)
1/21/2022*			74,000			$	42.5000
1/24/2022			(25,500	)		$	42.5369
1/25/2022			(18,507	)		$	44.0826
2/1/2022			(700	)		$	43.9000
3/7/2022			100			$	36.4800

 

*	Effected pursuant to the exercise of a Put Option (as defined in Item 6) by the options counterparty.

CUSIP No. 089302103				Page 8 of 10 Pages

 

Except as otherwise described in this Schedule 13D, the above listed transactions were conducted in the ordinary course of business on the open market for cash. The purchase and sale prices do not reflect brokerage commissions paid.

In addition, during the Reporting Period, the Fund sold the Put Options described in Item 6, which is incorporated by reference into this Item 5(c).

(d)    No person other than the Reporting Persons is known to have the right to receive or the power to direct the receipt of dividends from or the proceeds from the sale of shares of the Common Stock.

(e)    Not applicable.

 

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The table below lists the standard American-style, exchange-traded put options (Put Options) sold by the Fund during the Reporting Period, all of which are outstanding as of March 15, 2022. Each of the below listed transactions was conducted in the ordinary course of business on the open market for cash, and the sale prices do not reflect brokerage commissions paid.

 

Date of Sale		Value per Underlying Share at which Put Options were Sold ($)				Shares Underlying Put Options (100s)				Put Options Strike Price per Share ($)				Put Options Expiration Date
1/20/2022		$	6.8485				375			$	42.50				07/15/2022
1/21/2022		$	6.8577				557			$	42.50				07/15/2022

Each of these Put Options gives the options counterparty the right (but not the obligation) to sell to the Fund, on or before the options expiration date, the number of shares of Common Stock underlying the option, at a sale price per share equal to the options strike price per share. If a Put Option is exercised on or before its expiration date, the Fund must purchase the shares of Common Stock underlying the option in exchange for the options aggregate exercise price.

The table below lists the standard American-style, exchange-traded call options (Call Options) sold by the Fund during the Reporting Period, all of which are outstanding as of March 15, 2022. Each of the below listed transactions was conducted in the ordinary course of business on the open market for cash, and the sale prices do not reflect brokerage commissions paid.

CUSIP No. 089302103				Page 9 of 10 Pages

 

Date of Sale		Value per Underlying Share at which Call Options were Sold ($)				Shares Underlying Call Options (100s)				Call Options Strike Price per Share ($)				Call Options Expiration Date
3/2/2022		$	2.2801				145			$	40.00				04/14/2022
3/3/2022		$	1.7500				2			$	40.00				04/14/2022
3/4/2022		$	2.5000				143			$	40.00				04/14/2022

Each of these Call Options gives the options counterparty the right (but not the obligation) to purchase from the Fund, on or before the options expiration date, the number of shares of Common Stock underlying the option, at a purchase price per share equal to the options strike price per share. If a Call Option is exercised on or before its expiration date, the Fund must deliver the shares of Common Stock underlying the option in exchange for the options aggregate exercise price.

Except as otherwise described in this Schedule 13D, including the Exhibits attached hereto, there are no contracts, arrangements, understandings, or relationships (legal or otherwise) among the Reporting Persons, or between any Reporting Person(s) and any third party, with respect to any securities of the Issuer, including, but not limited to, those involving the transfer or voting of any of the securities, finders fees, joint ventures, loan or option arrangements, put or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.

 

Item 7.

Material to be Filed as Exhibits

 

Exhibit 1		Joint Filing Agreement by and among Thomas E. Lynch, Mill Road Capital III GP LLC and Mill Road Capital III, L.P. dated as of March 15, 2022.
Exhibit 2		Confirming Statement of Thomas E. Lynch dated March 15, 2022.
Exhibit 3		Letter from Mill Road Capital Management LLC to the Shareholders of Big Lots, Inc. dated March 15, 2022.

[signature page follows]

CUSIP No. 089302103				Page 10 of 10 Pages

 

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.