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 4/10 Good --- privateequity.bloggingstocks.com http://privateequity.bloggingstocks.com/rss.xml
Saturday, April 12, 2008 --- 117 days ago http://www.bloggingstocks.com/2008/04/11/linens-n-things-a-black-eye-for-private
| Filed under: Private equity Back in February 2006, Apollo Management purchased Linens 'n Things for about $1.3 billion. At the time, it looked like a sensible deal. After all, the company has a strong retail format (for home textiles, housewares and so on). What's more, there are over 500 stores in 47 states.
However, with the slowing economy - especially in the real estate sector - things have turned sour. In fact, according to the Wall Street Journal [a paid publication], it appears that Linens is planning a bankruptcy filing and has hired Conway Del Genio Gries, which is a top advisor on restructurings.
For Apollo, this will certainly be a black eye. Keep in mind that the firm has recently filed to trade on the NYSE. Plus, if there is a bankruptcy, it is likely to mean a significant reduction in the equity value of Apollo's investment in Linens.
When creditors sense trouble, things can get particularly bad for retailers. Basically, they will often hold back on shipments or require cash upfront. Plus, Linens has a $15 million debt payment due on Tuesday. And if it doesn't pay it, it looks like that will be the day the company will file for bankruptcy.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements . He also operates MergerBook.com . Permalink | Email this | Linking Blogs | Comments ... |
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