The Globe and Mail reports in its Friday, April 20, edition that an unnamed source says Toys "R" Us stores across Canada are in play as Fairfax Financial Holdings eyes the retailer.
The Globe's Jacqueline Nelson writes that the Canadian unit of Toys "R" Us entered into a confidentiality agreement with Fairfax on Thursday that could result in a $300-million deal that allows the business to exit bankruptcy protection and separate from its struggling U.S. parent company.
Other interested investors will have until Monday to bid for Toys "R" Us Canada and its 82 stores. If no rival offer emerges, Fairfax stands to take control of Toys "R" Us after making a so-called stalking horse proposal, where an interested buyer obtains approval for a backstop bid of a distressed company ahead of a formal auction.
Toys "R" Us Canada has some valuable real estate, owning 22 of its stores. These properties had an appraised value of about $220-million.
A deal between Fairfax and Toys "R" Us would come after a tumultuous few months of negotiations over whether the beloved brand could survive the rise of e-commerce and debt burdens. Toys "R" Us filed for bankruptcy protection in September.
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