The report states that JC Penney asks lenders higher bids for bankrupt retailer

According to a Bloomberg report, lenders for Jessie Penney want bidders to extend their offers to a bankrupt retailer.

According to the report, the bids under consideration are not enough for the lender to be worth about $ 2.2 billion after it was filed for bankruptcy in May. It cited people familiar with the matter, who said they could not be named because the deals were private. Earlier proposals were reported to be worth about $ 1.8 billion.

Three separate bids for the department store’s real estate and other assets are being considered, Joshua Sausberg of Kirkland & Ellis, the company’s attorney, said during a court hearing in late July. He did not disclose the names of the bidders or said which resolution was chosen.

The bidders are private-equity firm Secamor; Mall operators Simon Property Group and Brookfield Property Partners, who are making a joint bid; And Hudson’s Bay Company, owner of Saks Fifth Avenue, a person already familiar with the conversation, told CNBC.

Penny declined to comment. Representatives from Sycamore, Brookfield, Simon and Hudson’s Bay were not immediately available to comment.

Penny was also struggling before the coronovirus epidemic, as consumer shopping habits changed, and pushed sales away from online and department stores. But being forced to keep its stores closed for an extended period of time was the final blow for the debt-ridden company.

The department store is trying to recreate the terms of the lease, with plans to close its landlords and about 150 locations, and about 1,000 workers. At the time of his bankruptcy, Penny employed approximately 90,000 full and part-time workers.

The report states that saving jobs may be preferable to a bid that could result in mass layoffs and even if the offer is not the most valuable offer. It cited the 2019 decision to allow former Sears CEO Eddie Lampert to buy Sears Holdings as an example of how this process could be a factor.

Read Bloomberg’s full report.

– of CNBC Lauren Thomas Contributed to this report.


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