JCPenney Reaches Agreement in Principle with Brookfield Property Group and Simon Property Group to Acquire Retail and Operating Assets

J. C. Penney Company, Inc. (OTCMKTS: JCPNQ) today announced that it has reached an agreement in principle to sell JCPenney through a court-supervised sale process. The Company plans to seek approval of a disclosure statement and, ultimately, confirmation of a plan of reorganization in parallel with the sale process. Related to the sale process, JCPenney expects to execute a “stalking horse” asset purchase agreement (“APA”), which will track an executed letter of intent, outlining the following:
*Brookfield Property Group (“Brookfield”) and Simon Property Group (“Simon”) intend to acquire substantially all of JCPenney’s retail and operating assets (“OpCo”) for $1.75 billion, which includes a combination of cash and new term loan debt.
*The agreement contemplates the formation of a separate real estate investment trust and a property holding company (“PropCos”), which will include 161 of the Company’s real estate assets and all of its owned distribution centers. The PropCos will be owned by the Company’s Ad Hoc Group of First Lien Lenders (“First Lien Lenders”).
*The OpCo and PropCos will enter into a master lease with respect to the properties and distribution centers moved into the PropCos.

“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 maximize value for our stakeholders, ensure we keep the most stores open and associates employed, and position JCPenney to build on our over 100-year history,” said Jill Soltau, chief executive officer of JCPenney. “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 Results-Minded Culture.”

Ms. Soltau continued, “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.”

Upon the execution of the APA, the agreement will be binding on Brookfield, Simon, and the First Lien Lenders. JCPenney intends to file a motion seeking authorization from the U.S. Bankruptcy Court for the Southern District of Texas (the “Court”) to conduct an auction pursuant to Section 363 of U.S. Bankruptcy Code. Accordingly, the motion is expected to set out the proposed bidding procedures for the auction, with Brookfield, Simon, and the First Lien Lenders serving as the “stalking horse bidder,” designed to achieve the highest or otherwise best offer for the benefit of JCPenney’s stakeholders.

It is anticipated that the Company will complete the auction and emerge from the Court-supervised process operating under the JCPenney banner in advance of the 2020 holiday season.
more at: https://www.jcpnewsroom.com/news-releases/2020/0909_reaches_agreement_with_simon_and_brookfield.html

Related Posts

Microsoft to Permanently Close All Retail Stores (mytotalretail.com)

Microsoft said on Friday it will permanently close all of its 83 store locations and will instead focus on its e-commerce business, where customers can visit for support, sales, training and more. The decision comes after Microsoft temporarily closed stores in March due to the spread of the coronavirus. Microsoft said the thousands of workers from these stores have already transitioned to new roles where they're providing sales, training, and support to customers from Microsoft corporate facilities or remotely. Total Retail's Take: Microsoft opened its first brick-and-mortar store in 2009, where people could go to try the company's software and hardware. This decision was made after Apple, its main competitor, was enjoying great success and popularity with its modern, clean retail outlets. Over the past decade, Microsoft expanded its retail presence in an effort to create a shopping experience similar to Apple’s.

Sur La Table files for bankruptcy with plans to close nearly half its stores (chainstoreage.com)

Sur La Table is slashing its store footprint as it seeks to prosper under new ownership. The nearly 50-year-old, upscale kitchenware retailer said it filed for Chapter 11 bankruptcy protection after considering the "rationalization of its national store footprint and “certain store closures to prosper in the current retail environment.” On its FAQ page, the privately held Sur La Table said it has decided to close over 50 of its 121 stores (see list at end of article). Great American Group LLC and Tiger Capital Group LLC will conduct the liquidation sales, which are expected to last eight to 12 weeks. “We have filed for Chapter 11 bankruptcy protection to reduce the company’s expenses and recover from the financial impact of the COVID-19 crisis,” the company stated on its FAQ page.

Gap Inc. Canada Donates Over $3 Million of New Clothing to Canadians in Need

In response to the COVID-19 crisis that has left many Canadians struggling to provide basic necessities for their families, Gap (Canada) Inc. will be donating more than $3 million of new Gap, Banana Republic and Old Navy (Canada) clothing to those in need, including unemployed Canadians who need support getting back to work and getting back on their feet. In partnership with Delivering Good – a non-profit organization that unites retailers, manufacturers, foundations and individuals to support those affected by poverty and tragedy – Gap (Canada) Inc. will donate the clothing to LIFE*SPIN in London, Ontario. This donation will help people as they build a brighter future and is the latest in the company’s ongoing efforts to support its communities and be the change, together.
Back To Top
×Close search
Search