*

Anonym redoubles push to persuade LKQ to sell European

business

*

Hedge fund says there are buyers interested in the

European

business

*

Proceeds from a sale could be used to reduce leverage, buy

back

stock

(Updates with comment from company in paragraph 4)

By Svea Herbst-Bayliss

NEW YORK, Oct 31 (Reuters) - Anonym Capital has

intensified its call for auto-parts supplier LKQ to sell

its European business, stressing that there are interested

buyers and that the proceeds could be used to buy back shares,

according to a letter to LKQ's board on Friday that was seen by

Reuters.

The letter, following close on the heels of the company's

third-quarter earnings report the day before, pressed the

activist hedge fund's point that keeping the European and North

American businesses together makes little sense.

"While management continues to pursue the arduous task of

trying to integrate the disparate collection of businesses that

comprise the EU business, LKQ continues to suffer from a

substantial sum-of-the-parts discount and to dramatically lag

its peers in share price performance," the hedge fund wrote.

A representative for LKQ said: "We regularly engage with our

shareholders, but we do not comment on the details of those

discussions."

TOTAL RETURN ON LKQ STOCK LAGS PEERS OVER PAST YEAR

On Thursday's earnings call with analysts, CEO Justin Jude

said: "The challenges in Europe affect the entire industry but

LKQ excels in such environments, as shown by our own success in

North America. Having integrated businesses in tough settings

before, I am confident we can achieve similar results in

Europe."

The strong North America performance powered a more than 5%

rise in LKQ's stock during Thursday's session, but its close at

$31.16 left it down more than 16% for the past 12 months.

Anonym's letter noted that the total return on stock in LKQ,

which has a market value of $8 billion, has 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.

It added that, instead of trying to integrate 20 REP

software systems across 900 locations in 18 different countries

in Europe, management should talk to potential buyers who could

handle the integration and free up LKQ executives to concentrate

on running its "crown jewel NAB (North America) collision

business."

PUSH FOR SEPARATION

Management could use the proceeds from selling the European

business to reduce leverage and buy back shares, which would

create more benefits for shareholders than trying to run the

European business in the coming years, the hedge fund said.

Anonym has been holding discussions with

Chicago-headquartered LKQ in recent months and has been largely

complimentary of the company's CEO, Justin Jude, who was named

to the position in July 2024.

But in late summer, the hedge fund stepped up its push for a

separation or sale of the European business after disappointing

second-quarter earnings, when investors pushed the stock price

down more than 20%.

The company has taken steps to simplify its portfolio, and

in August announced the sale of its self-service segment to

private-equity firm Pacific Avenue Capital Partners.

Anonym was founded last year by Charlie Penne, the architect

of a massive three-board-seat victory at Exxon Mobil ( XOM ) in

2021, and former P2 partner Alex Silver.