Canada’s Fairfax Financial Holdings Ltd. has offered to buy Toys “R” Us’s Canadian stores out of bankruptcy for $300 million, WSJ Pro Bankruptcy reported. The offer, revealed on Thursday in filing in U.S. Bankruptcy Court in Richmond, Va., is subject to higher bids at a court-supervised auction. The sale would also include the Canadian business’ intellectual property, including its brands. The retailer is seeking court approval to name Fairfax, the Toronto-based investment firm controlled by financier Prem Watsa, as the stalking horse, or lead bidder, at the auction. Companies selling assets in bankruptcy often seek to name a stalking horse to set a floor price to encourage bidding. In addition to the 82 Canadian stores, Toys “R” Us has put the option to buy 200 of its best performing Toys “R” Us and Babies “R” Us U.S. stores on the table. Fairfax’s offer is solely for the Canadian stores, however. An auction for the retailer’s Canadian assets is scheduled to be held Monday in New York at the offices of Toys “R” Us’s bankruptcy lawyers. A sale hearing is slated for Tuesday. Read more.
In related news, Irish toys group Smyths Toys has signed a deal to take over Toys “R” Us in Germany, Austria and Switzerland, the German arm of the insolvent retailer said on Saturday, Reuters reported. Once the largest U.S. toy retailer, Toys “R” Us abandoned a plan to emerge from bankruptcy last month and said it would try to maintain more profitable locations in Europe and Asia as an on-going business while liquidating its U.S. and UK operations. Family-owned Smyths will acquire 93 shops and four online stores via the planned deal, Toys “R” Us said in a statement on its German website. Financial details were not disclosed. The Irish company, which runs 110 stores plus websites in Britain and Ireland, plans to take on all the Toys “R” Us units, staff and management in Germany, Austria and Switzerland. Read more.
