If approved Nov. 13 by U.S. Bankruptcy Court Judge Kevin Gross, the asset-purchase agreement would restore family control to the company founded by Boscov's father 97 years ago, a chain whose 39 stores anchor many of the region's malls and which sponsors Philadelphia's annual Thanksgiving Day Parade.
The bid, which the company said had the support of its creditors, is backed by a team of private investors who include Boscov and his brother-in-law Edwin Lakin, 85. Both men watched the company fall on hard times after they retired from the helm in early 2006.
Terms were not disclosed. But a source familiar with the deal said the Boscov-Lakin offer included "substantially more equity" than the $11 million in cash offered by the Philadelphia private-equity firm Versa Capital Management Inc., whose own bid was valued at more than $225 million. Versa withdrew its bid.
The hefty cash component of the Boscov-Lakin offer was pivotal in persuading the major banks holding Boscov's multimillion-dollar loans and lines of credit to accept a plan that would keep the chain running rather than forcing a liquidation.
"I believe that this agreement maximizes the value of our business and the return to our creditors," Boscov's chairman and chief executive officer, Ken Lakin, said in a prepared statement. "It also provides certainty about the future direction of our company."
Lakin, who did not return calls for comment, said the buyout offer by his father and father-in-law would leave the chain well-capitalized so it could "build a stronger and more competitive business."
A formal financing agreement was not yet in place, but the company expressed confidence that it would be completed by the end of the month.
