PETRIE AMENDS STORE SALE DEAL
SECAUCUS, N.J. — Petrie Stores Corp. said Thursday it amended its agreement to sell its retail operations to an investor group led by E.M. Warburg Pincus & Co.
Petrie’s obligations to consummate the sale are no longer conditioned on the closing of a share-exchange transaction with Toys “R” Us.
The stock transaction is conditional upon the sale of Petrie’s retail operations for $190 million in cash, to be financed on an all-equity basis, and on Petrie receiving a ruling from the Internal Revenue Service that the transaction will be tax-free to Petrie Stores, Toys “R” Us and Petrie Stores’ shareholders.
In August, Petrie said it entered into an agreement with Toys “R” Us to exchange Toys “R” Us common shares and cash for newly issued Toys “R” Us common shares. Accordingly, Toys “R” Us will issue 36.6 million common shares plus common shares having the value of cash transferred by Petrie Stores to Toys “R” Us.
In addition, the Warburg group on Thursday executed a commitment letter with Chemical Bank and The Chase Manhattan Bank for a $250 million senior secured revolving credit facility to finance the ongoing Petrie Stores retail operations.
“With the commitment letter, this transaction should smoothly close in early December,” said Gilbert Harrison, chairman of Financo Inc., the investment banker for the deal. “Petrie and Warburg independently determined they wanted to move as quickly as possible.”