KPS’ $280 million bid is $20 million higher than the one offered by Oaktree Capital Management, which had initially been favored by Furniture Brands to be its stalking horse bidder.
A stalking horse bid sets a minimum on an auction for a company’s assets, and allows other potential suitors to make offers.
According to Furniture Today, bids are due by Dec. 5, and a court-supervised auction is scheduled Dec. 10, if necessary. A hearing to confirm the sale is Dec. 12.
Oaktree originally offered $166 million but excluded Lane Furniture Industries of Tupelo from its deal. KPS countered the offer with $225 million and included Lane.
In subsequent moves, KPS and Oaktree upped their offers. Most recently, Oaktree offered $260 million, while KPS countered with $280 million. And in both bids, Lane was included in the asset sale.
Furniture Brands’ bankruptcy petition was filed in Delaware, and is being presided over by U.S. Bankruptcy Judge Christopher Sontchi.
He approved KPS’ stalking bid offer on Wednesday, even though Furniture Brands had favored Oaktree’s lower bid. An unsecured creditors committee favored KPS’ offer. Sitting on the committee is Tombigbee Electric Power Association, which is owed $510,000 by Furniture Brands thorugh its Lane Furniture operations.
Oaktree has already been approved to provide up to $25 million in interim financing to allow Furniture Brands to continue operations.
However, Furniture Today reported that Oaktree will be paid for the financing and related fees.