The U.S. Bankruptcy court last week weighed arguments from Footstar, Inc. and the lawyers representing the Unsecured Creditors Committee regarding competing bids for the assets of the companys remaining Footaction stores. Footstar was urging the Court to approve the previously-announced sale of the 353 stores to Foot Locker, Inc. for $160 million and the UCC was pushing a bid by rival The Finish Line for 192 stores for $195 million.
In the end, the Court approved the Foot Locker deal, but not before the price tag jumped more than 40% to $225 million in cash. Sun Capital Partners apparently fell out of the running early in the price after offering just $100 million for all of the Footaction stores.
The Foot Locker deal must still pass the FTC and Hart-Scott-Rodino anti-trust tests.
Footstar has also entered into agreements to assign 15 Just for Feet leases to third parties, with Shoe Show and Hibbett, among others, picking up some assets. Those deals are said to be worth another $750,000 and will stave off approximately $5 million in bankruptcy rejection claims related to the affected leases.
>>> Hard to pick the winners here until we know what Foot Locker plans to do with the format. Its an awful lot of overlap for their current stores
>>> Anyone else find it very interesting that the UCC, which is largely comprised of Footaction vendors, would back the Finish Line bid? May speak volumes…
