Bon-Ton Department Stores, currently in Chapter 11, announced on April 9 it has received a signed letter of intent from a group of investors, including two leading mall operators, to buy “all of the assets” of the beleaguered department store chain.
The investor group is made up of DW Partners, an alternative asset manager; Namdar Realty Group, a commercial real estate investment and management firm, which is working with partner Mason Asset Management; and Washington Prime Group, a retail real estate investment trust that owns, manages, and develops retail properties.
Bon-Ton is a significant tenant in both Namdar and Washington Prime malls, and this bid is in part an effort to preserve the value of their malls, according to Reuters, quoting sources close to the situation.
In a motion filed April 9 in Delaware bankruptcy court, the company said it has been working to preserve the company’s business, “thereby saving over 20,000 jobs and preserving a 120-year-old business that is a significant customer for its vendors, an anchor tenant for many of its landlords, and the leading hometown department store for millions of consumers in local communities throughout 23 states.”
The proposed bid would have the investors pay $128 million for the company’s assets. The company and investor group are now finalizing an asset purchase agreement ahead of Bon-Ton’s scheduled April 16 auction of its assets.
The company has received three other bids for its assets, although all the other bids contemplate liquidating the company, according to the motion.
A group of bondholders, led by hedge fund Brigade Capital Management, has been calling for the retailer’s dissolution.
Bon-Ton filed for Chapter 11 bankruptcy protection on Feb. 4 in Delaware federal court. The chain operates stores under the names Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s, and Younkers.
The company’s stores remain open and are still servicing customers.
The Bon-Ton bankruptcy papers can be seen here.
(Image via Flickr)
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