TOYS ‘R’ US IN DEMAND – Receives Multiple Bids

 – hope for survival. Todd Horwitz, Bubba Trading


Toys ‘R’ Us Inc.’s U.S. business is in the midst of a wind-down, but its Asian business may have hope for survival. The toy retailer has received multiple bids of more than $1 billion for a majority stake in its Asian business, the company’s bankruptcy attorney said in court on Wednesday.

Interested bidders are looking to take an 85% stake in the Asian business. Bankruptcy lawyer Joshua Sussberg of Kirkland & Ellis updated the court on the status of the company’s Asian business during a hearing in which the Toys ‘R’ Us won approval to borrow an additional $80 million under its bankruptcy loans to support its healthy overseas operations.

In the United States, liquidation sales and real estate auctions were going better than expected, Sussberg said, creating additional money to repay creditors.

Toys ‘R’ Us suppliers have expressed concern in court papers over payments on hundreds of millions of dollars of toys that had been shipped before the company announced its liquidation plans. Industry executives and specialists have warned that many small vendors could go bankrupt themselves due to the disappearance of Toys ‘R’ Us and Babies ‘R’ Us in the United States. The retailer, with nearly 1,600 stores when it filed for bankruptcy protection in September, was the largest dedicated showcase for toys ranging from popular classics like Lego to innovative trends by small companies.

“The Asian businesses and the Central European businesses are very healthy and there is no reason they need to be dragged down by everywhere else in the world,” said Brian Hermann of Paul, Weiss, Rifkind, Wharton & Garrison LLP, who represents an ad hoc committee of noteholders. Although Toys ‘R’ Us is currently conducting a sale process for the Asian businesses and has received indications of interest, it needs the additional financing to shore up vendors’ confidence in the company, Mr. Hermann said. “We can’t just rely on indications of interest…We want to show that there is liquidity and there is no reason to doubt Asia and Europe,” he said.

Keep those stops tight
Todd “Bubba” Horwitz


Financial Markets & Political Commentary



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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.