Sportsman’s Warehouse is planning to make a bid in bankruptcy court to acquire up to 80 percent of Gander Mountain’s stores, sources told Bloomberg. Sportsman’s Warehouse is said to be still deciding whether it will convert or keep the Gander Mountain name on any acquired stores.
In late March, Gander Mountain, which filed for bankruptcy protection on March 10, reached an agreement with a joint venture comprised of Gordon Brothers and Hilco Merchant Resources to purchase substantially all of its assets. Gordon Brothers and Hilco became the stalking horse bid for an upcoming auction. The stalking horse bid sets a minimum baseline for others to submit bids.
The deadline for others to submit bids was set for Monday, April 24, according to court papers filed in U.S. Bankruptcy Court District Of Minnesota. The auction will occur April 27 assuming at least one other qualified offer arrives. The court hearing on the sale would then take place on May 1 with the closing aimed for May 15.
Sportsman’s Warehouse operates 79 retail locations in 22 states, largely out west. Gander Mountain’s 160 locations are concentrated in the east. As part of its bankruptcy proceedings, 32 of its 160 locations are in the process of being liquidated.
In announcing its deal to reach an agreement with the liquidators to become the stalking horse bidder, Gander Mountain said, “Gander Mountain believes it has substantial market value to strategic buyers and that its agreement provides a competitive baseline to evaluate subsequent offers and maximize value to its stakeholders. The company and its advisors remain in discussions with a number of interested parties that are engaged in due diligence in an effort to finalize proposals, offers and bids.”
According to court documents, Gander Mountain would collect 91 percent of the wholesale cost of the items should the bid from Gordon Brothers and Hilco prevail and the stores are liquidated. Gander Mountain would recover between $390 million to $430 million, according to the estimates. If their bid is topped, the liquidator group would net a break-up fee of $2 million.
Photo courtesy Gander Mountain
