Fingerhut may have a buyer
Group led by Peter Lytle in preliminary deal to acquire direct marketer.
February 22, 2002: 12:38 p.m. ET
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NEW YORK (CNN/Money) - Business Development Group Acquisitions Inc., a business group led by turnaround specialist Peter Lytle, has signed a binding letter of intent to acquire direct marketer Fingerhut from Federated Department Stores Inc.
The agreement is a preliminary step which could lead to the sale of Fingerhut, Federated said.
Wayzata, Minn.-based BDGA must still obtain sufficient financing as well as perform additional due diligence on the transaction, which was announced Thursday. BDGA will notify Federated in early March if it will proceed with the purchase, which could lead to a definitive agreement at that time, the companies said.
Financial terms were not announced but press reports said the unit could command $500 million to $1 billion. Federated noted that it is not in talks with other parties regarding the sale of Fingerhut. Cincinnati-based Federated (FD: down $1.15 to $37.49, Research, Estimates) is the parent of the Macy's and Bloomingdale's department stores.
In January, Federated said it planned to close Fingerhut and lay off its 6,000 employees if it didn't find a buyer. Federated bought Fingerhut, a leading direct marketer, in 1999 for $1.7 billion. The department store retailer expects to generate about $1.1 billion to $1.3 billion in after-tax cash proceeds over the next four years once it disposes of Fingerhut.
"The sale of Fingerhut as a going concern remains our top priority and, if a sale is feasible, Federated is prepared to move as quickly as possible to get this done," Federated Vice Chairman Ronald Tysoe said. 
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