BJ's Wholesale Club Inc may put itself up for sale, under pressure from a private equity firm that may make a hostile bid, and its shares jumped more than 13 percent.

The company said its board decided to explore a sale and other alternatives, and that it had hired Morgan Stanley & Co to advise it in the process, confirming media reports from early November that an evaluation was under way.

Private equity firm Leonard Green & Partners may make a hostile bid for BJ's, the New York Post reported in December. In July, a fund run by Green said it had taken a 9.5 percent stake in the company.

BJ's said on Thursday that it has not decided to pursue any specific option and there is no timetable for the process.

Walter Stackow, an analyst at Manning & Napier, which has been a long-term investor in BJ's, said the company would be attractive to private equity, offering an opportunity to increase margins and profit from a strong food and grocery business that is gaining market share.

BJ's is a business that has potential to expand margins and they can attract private equity because it generates a lot of cash, he said. Food inflation could potentially become a tailwind for BJ's grocery business.

Stackow said a competitor or supermarket would be a less likely buyer.

Janney Capital Markets analyst David Strasser estimates the take-out price for BJ's in the low- to mid-$50 per share range, compared with its close at $43.01 on Wednesday.

We believe that going private makes sense due to the potential for a national store roll-out, he said in a research note.

The company could go private and accept earnings dilution, while preparing a national roll-out by entering a variety of markets beyond its core markets (i.e. the Northeast and Southeast), and come back public as a growth company, added Strasser, who has a buy rating on the stock.

BJ's said sales at stores open at least a year rose 0.3 percent in January, excluding gasoline sales, hurt by snow in the Northeast and Mid-Atlantic regions, where its stores are concentrated.

Last month, BJ's, which competes with Wal-Mart Stores Inc's Sam's Club and Costco Wholesale Corp , announced plans to close five stores, restructure some operations and bring in fresh management. Stackow said a buyer could close more weak stores.

The wholesale club said it will not provide updates or make further comments about the process unless a specific action is recommended by a committee of independent directors or the process is concluded.

BJ's shares were up 13.3 percent to $48.75 in early trading on the New York Stock Exchange.

(Reporting by Ben Klayman, additional reporting by Phil Wahba in New York and Jessica Wohl in Chicago; editing by John Wallace, Derek Caney, Dave Zimmerman)

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