Mall owners Namdar, Washington Prime in bid to buy Bon-Ton -sources
03/04/2018 21:40
By Jessica DiNapoli and Tom Hals
April 3 (Reuters) - U.S. mall owners Namdar Realty Group and
Washington Prime Group Inc WPG.N are in talks to acquire U.S.
department store operator Bon-Ton Stores Inc BONTQ.PK out of
bankruptcy, people familiar with the matter said on Tuesday.
Namdar's and Washington Prime's bid for Bon-Ton offers a
path for the retailer to survive, three sources said. Firms
specializing in liquidation plan to submit a $740 million offer
for Bon-Ton in partnership with its bondholders. If that bid
were to prevail, the company would be dismantled.
Bon-Ton, which filed for bankruptcy in February with about
250 stores, is a significant tenant of both Namdar and
Washington Prime malls. Its survival would help protect the
value of these malls, the sources said. Namdar plans to work
with its partner, Mason Asset Management, which jointly invests
with Namdar and manages its properties, on the bid.
Bon-Ton extended the deadline for bids in its bankruptcy
auction last week to April 4, after announcing it was in active
discussions with a bidder whom it did not identify. That bidder
is the consortium of Namdar and Washington Prime, according to
the sources. urn:newsml:reuters.com:*:nL1N1RD01L
Namdar and Washington Prime are still working on securing
funding for the deal, and may use their properties to raise debt
to finance the acquisition, the sources said. There is no
certainty their bid will be successful, and it is possible the
bid deadline is extended once again, one of the sources added.
Namdar and Mason declined to comment. Washington Prime and
Bon-Ton did not immediately return requests for comment.
Liquidators and Bon-Ton's bondholders, led by hedge fund
Brigade Capital Management LP, have been calling for Bon-Ton's
wind down for months. Their $740 million offer for the company
includes $540 million in cash and the bondholders' debt, one of
the sources said.
The bondholders' bid would fund Bon-Ton's wind-down, and
would also give the retailer's other creditors the option to
acquire the department stores' leases, intellectual property and
shop fixtures. The creditors could then sell those assets to any
parties interested in re-opening the stores, the sources said.
Namdar and Mason own about 130 malls across the United
States and in recent years have acquired properties from several
real estate investment trusts, including CBL & Associates
Properties Inc CBL.N , Pennsylvania Real Estate Investment
Trust PEI.N and GGP Inc GGP.N . It has also bought properties
out of bankruptcy auctions.
Washington Prime, spun out of Simon Property Group Inc
SPG.N in 2014, owns interests in 108 properties.
(Reporting by Jessica DiNapoli in New York and Tom Hals in
Wilmington, Delaware; additional reporting by Carl O'Donnell and
Melissa Fares in New York; Editing by Lisa Shumaker)
((Jessica.DiNapoli@thomsonreuters.com; 646-223-4678;))