The Business Development Group Acquisitions (BDGA) announces today, that more than a month after entering into a non-binding letter of intent with Federated Department Stores, Inc. (Federated), that the two sides continue discussions in an attempt to reach a definitive agreement.
The BDGA has received letters of intent for an underwritten bank financing. The bank group does require additional due-diligence on the value of the assets and other related issues. The BDGA has also received letters of intent from equity investors, which will also require additional due-diligence related to the business. The BDGA has completed its due-diligence, and has shared this information with all related parties in order to speed up the process of reaching a definitive agreement.
The BDGA hopes to shortly provide Federated with sufficient financial comfort to enter into a definitive agreement. Peter Lytle, managing partner of the Business Development Group, has stated he remains optimistic that a deal can still occur between the two parties. "We believe that letting the employees know the status of this transaction is important, especially if they are in a location or business we do not intend to acquire." Additionally, BDGA would intend to begin rehiring individuals after acquiring the company and believes that it could again grow the company following a successful repositioning program.
Both parties continue to work closely and in a spirit of joint cooperation to help preserve jobs and conclude a sale of Fingerhut. Ronald Tysoe, vice chairman for Federated said, "We want to ensure that all affected employees are provided severance benefits and that they are taken care of to the fullest extent possible in these very difficult circumstances. We even told the union that we are willing to offer severance benefits for its members that are in excess of those provided for in existing union contracts. We have done so because we believe that ensuring that all employees, both union and non-union, get enhanced severance benefits - even as we explore asset sales that could lead to the rehiring of many of these employees - would be the best possible outcome for the individuals and communities affected so that is our goal."
The BDGA does not intend to have a press conference on this topic but remains committed to completing this acquisition process.
The BDGA is located in Wayzata, MN and is a turnaround management firm with a variety of investments in businesses throughout the Midwest.
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