THREE CITIES’ SASSCO BID HAS GOTTEN NO ANSWER
NEW YORK — One week after a New York investment company presented a $225 million cash and notes offer for The Leslie Fay Cos.’ Sassco unit, the only response it has heard is silence.
A source close to the investment company said Friday the group, Three Cities Research, was baffled by Leslie Fay’s inaction on its offer, which, he said, was the only bona fide offer for the profit-making suit division in the three years Leslie Fay has been operating under Chapter 11.
Three Cities’ $225 million offer, which includes $170 million cash, was made in a letter to four major creditors, Balfour Investments, Fidelity Management & Research Company, Wipporwill Associates and ING Equity Partners LP. A copy of the letter was also sent to Leslie Fay’s lawyer and the company’s creditors’ committee.
A Leslie Fay spokesman would not comment on the offer, and attorneys for the company and for the creditors’ committee did not return phone calls.
Each of the creditors bought their positions in Leslie Fay by purchasing trade and other claims in the open market. Representatives of the four groups could not be reached for comment. However, a person close to one of the groups said they were not bowled over by the bid and had no plan to respond to the term sheet.
The Three Cities offer is the second bid for Sassco. Arthur S. Levine, Sassco’s chairman, has had a bid in the offing for nearly a year. Levine has had trouble raising the funds needed to carry out the bid, according to trade rumors Friday. Levine did not return a phone call.
If the bids made by both Levine, who founded Sassco and sold it to Leslie Fay in 1979, and by Three Cities are not acted upon, Leslie Fay has said it will spin off Sassco for the benefit of Leslie Fay creditors.
Leslie Fay creditors, frustrated over the lack of action on the Sassco deal, have given Leslie Fay until Jan. 31 to bring the deal to life. Recently, creditors have reportedly reached out directly to Bank of Boston to help put the deal on a fast track.
Leslie Fay, which filed for Chapter 11 protection in April 1993, recently postponed until March 4 a hearing to approve its disclosure statement. An attorney for the company said the postponement was related to the delay in the Sassco deal.