The Bon-Ton Stores Inc. said it is in “active discussions” with parties interested in making a “going-concern bid” to acquire the retailer.
Bon-Ton in February filed a voluntary petition for Chapter 11 bankruptcy court protection in a Delaware bankruptcy court. This past week, the retailer received approval from its lenders to extend the deadline to Wednesday for the submission of qualified bids. The original deadline was Monday. The company said it would evaluate qualified bids, with the assistance of its advisors, to determine which ones maximize value for the company and its stakeholders.
A bankruptcy-court approved auction is scheduled for April 9, followed by a court hearing to approve a sale of the company on April 13.
A bid, if one is submitted, would complete the “Hail Mary pass” the retailer needed to keep the company in business and 23,000 employees employed. When the company filed its bankruptcy petition and related court documents, the paperwork disclosed that a marketing process began in mid November to sell the company. Outreach was made to 38 possible buyers, with seven signing confidentiality agreements. While there were no formal indications of interest, some noted a “desire for ongoing discussions as the restructuring process unfolded.” It could not be determined whom those parties might be.
Debt holders already have indicated they would be willing to convert a substantial portion of their debt to equity, but only on the condition that Bon-Ton find an investor who would “assume majority ownership” of the reorganized company.