Aeropostale discusses sale to Versa Capital
- S&P 500, Nasdaq set records as tech, banks lead
- Texas Instruments (TXN) Tops Q4 EPS by 20c, Issues Solid Q1 Outlook
- Intuitive Surgical (ISRG) Tops Q4 EPS by 10c; $2B Accelerated Share Repurchase
- Seagate Technology (STX) Tops Q2 EPS by 30c
- After-Hours Stock Movers 01/24: (BOBE) (STX) (WDC) Higher; (NEWT) (MRCY) (CA) Lower (more...)
A customer enters an Aeropostale store in Broomfield, Colorado, United States May 14, 2015. REUTERS/Rick Wilking/File Photo
Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.
By Jessica DiNapoli
NEW YORK (Reuters) - Aeropostale Inc
Versa, which specializes in distressed investments, would pay an undisclosed amount of cash for Aeropostale's inventory and take on over 500 of the chain's leases, located mostly in malls across the United States, according to the filing made late on Thursday.
Versa's offer would be a potential stalking horse bid in a bankruptcy auction for the retailer scheduled for later this month, setting the minimum price for other potential buyers. Other bids are due Aug. 18.
Spokespeople for Aeropostale and Versa declined to comment.
Aeropostale is currently ensnared in a legal battle with one of its lenders, private equity firm Sycamore Partners, creating uncertainty in the auction process.
The retailer claims Sycamore pushed it into bankruptcy and has asked a U.S. bankruptcy court judge to bar the private equity firm from using the money it is owed to bid. Aeropostale is also asking that the judge reduce how much Sycamore would be repaid on its $150 million loan.
The matter is scheduled to go to trial later this month.
Because of the uncertainty, Versa will not advance negotiations unless Aeropostale reimburses the firm for the expenses it incurs in its work on the potential bid, according to the filing. The retailer is asking a U.S. bankruptcy judge for permission to pay Versa up to $500,000 of its expenses.
Because the deal would keep Aeropostale's U.S. operations up and running, it would help boost the value of the retailer's international business and intellectual property, the filing states.
Close to 10 teen apparel retailers including Aeropostale have filed for bankruptcy over the past two years amid fierce competition and stagnating sales.
Versa bought another mall-based teen retailer, The Wet Seal Inc, out of bankruptcy last year.
(Reporting by Jessica DiNapoli; Editing by Leslie Adler)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- TerraForm Power (TERP) Enters Exclusivity Agreement with Brookfield Asset Management Regarding Possible Deal
- Protesters vow to battle Trump's 'poor decision' to revive pipeline
- Former N.Y. fund analyst goes on trial for insider trading
Create E-mail Alert Related CategoriesReuters
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!