Bloomberg reports that Tesco's US supermarket chain, Fresh & Easy Neighborhood Markets,"canceled its proposed auction after receiving no offers to compete with a bid from an affiliate of billionaire Ron Burkle’s Yucaipa Cos.
"The company will seek bankruptcy court approval on Nov. 22 to sell virtually all of its assets to the affiliate of Los Angeles-based Yucaipa, according to court documents filed Nov. 15 in Wilmington, Delaware. Under the proposed deal, a Tesco affiliate would lend the Yucaipa unit $120 million to help finance the acquisition, according to court papers. Tesco would get warrants to buy as much as 10 percent of the reorganized chain’s equity, while Fresh & Easy would get a 22.5 percent stake."
"The company will seek bankruptcy court approval on Nov. 22 to sell virtually all of its assets to the affiliate of Los Angeles-based Yucaipa, according to court documents filed Nov. 15 in Wilmington, Delaware. Under the proposed deal, a Tesco affiliate would lend the Yucaipa unit $120 million to help finance the acquisition, according to court papers. Tesco would get warrants to buy as much as 10 percent of the reorganized chain’s equity, while Fresh & Easy would get a 22.5 percent stake."
- KC's View:
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Far more interesting than the auction process will be what Yucaipa does with Fresh & Easy once the deal is completed.
