US department store chain JCPenney has announced it is nearing a buy-out deal.
Almost four months after filing for bankruptcy, Brookfield Property Group and Simon Property Group (Simon) have offered to buy the Texas-based retailer’s operating assets and stores for US$1.75bn.
The price includes a combination of JCPenney’s cash and new term loan debt.
According to a statement, the asset purchase agreement will also consider the formation of a separate real estate investment fund and property holding company.
This will apply to 161 of JCPenney’s real estate assets and its currently owned distribution holdings.
“We have determined that an agreement with Brookfield and Simon, as well as the formation of separate real estate investment trusts owned by our first lien lenders, is the best path forward to maximise value for our stakeholders, ensure we keep the most store open and associates employed, and position JCPenney to build on our over 100-year history,” said Jill Soltau, JCPenney’s CEO.
“The interest in our operations reflects our company's strength and our loyal customer base.
“It is a testament to the hard work and dedication of our talented associates and the progress we have made in implementing our plan for renewal to offer compelling merchandise, drive traffic, deliver an engaging experience, fuel growth and build a result-minded culture.”
In June, the fashion, beauty and homeware retailer announced the closure of more than 150 stores, spanning 38 states, following the impacts of the coronavirus pandemic and subsequent lockdown.
Soltau added: “As we continue to move through the sale process, our focus will remain on serving our customers and working seamlessly with our vendor partners.
“We have been a trusted partner to all of our stakeholders since 1902, and we expect to continue that track record for decades to come under the JCPenney banner.”
The group is seeking approval of a disclosure statement and is expected to complete the sale ahead of the festive season.