SECAUCUS, N.J. -- A group of investors, including Verna Gibson, who is a former president of The Limited Stores, has started negotiations with Petrie Stores Corp. to acquire its retail operations for between $200 million and $250 million in cash.

The group, led by E.M. Warburg, Pincus & Co., a venture banking and investment counseling business, includes Petrie's senior management. Peter Left, who is Petrie's vice chairman, chief operating officer and chief financial officer, and Allan Laufgraben, who is the president and chief executive officer, are participating in the deal. A spokesman for Warburg said that if a sale goes through, it will be an all-cash, nonleveraged transaction. If an agreement is not reached by July 25, either side can terminate the exclusivity arrangement. As reported in April, Petrie has been in talks with three potential buyers, including one who has been working with the management group that is now in place. Gibson -- who is currently a principal in Retail Options, a consulting firm -- could not be contacted on Friday to discuss her plans.

The proposed sale is part of a plan to exchange Petrie's 40.4 million shares in Toys "R" Us for 37.1 million newly issued Toys "R" Us shares. These new shares will be distributed to Petrie shareholders.

In addition, the plan involves selling the retail business and the proceeds are to distributed to Petrie shareholders. Milton Petrie, who is the 91-year-old founder of the women's apparel chains, owns 60.2 percent of the stock in Petrie.

Petrie operates more than 1,700 stores in the United States, Puerto Rico and the U.S. Virgin Islands.

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