With fewer than 24 hours to go before Sports Authority’s self-imposed deadline for other companies to bid on its assets and store leases, the only competitor that seemed interested in bidding is reportedly now backing away from the deal.
Bloomberg, citing sources close to the matter, reports that Modell’s Sporting Goods, which was rumored to have been interested in buying some of the bankrupt company’s stores and keeping them alive, is walking away from the talks with Sports Authority.
Sources say that the two companies couldn’t agree on a price for the sale of assets.
While an auction of Sports Authority’s assets is set for May 16, the company had set a self-imposed deadline on May 11 to settle on a bid for sale.
“As part of the Chapter 11 process, Sports Authority is pursuing a sale of some or all of the business,” a Sports Authority representative said in an e-mailed statement. “We have received expressions of interest from a number of potential buyers, and we are optimistic about the results of the M&A process, which runs through the end of May.”
Modell’s could not be reached for a comment.
Last week, an attorney for Sports Authority told a bankruptcy court that it had expectations that “substantial parties” will soon make offers for the retailer’s operations.
“Contrary to rumors and certain press reports, the debtors are not liquidating today,” Robert Klyman said at a hearing in the U.S. Bankruptcy Court in Delaware last week. “Liquidation is not in our vocabulary.”
Klyman told the judge that a “stalking horse” — a potential buyer that would make a baseline tender offer for an auction — was not identified by the April 28 deadline to obtain an offer, but that interest in Sports Authority’s assets “remains high.” A deal could be reached before a May 16 asset auction that would include a separate auction for 140 leases on stores that were previously earmarked to be liquidated, he said.
If no viable bids are made before May 16, the chain could face liquidation.
Yesterday, analysts said they believe that the main bidder in next Monday’s auction will be Dick’s Sporting Goods. They came up with the figure of 80 to 180 by looking at current Sports Authority locations. If there wasn’t a current Dick’s or Academy Sports store open within 5 miles, they considered it a good target for purchase. However, unlike the potential deal with Modell’s, Dicks’ would likely rebrand stores under its own banner.
Modell’s Said to Back Away From Bid for Sports Authority [Bloomberg]
by Ashlee Kieler via Consumerist
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