Federated Department Stores, Inc. (NYSE:FD)(PCX:FD) announced today that it has signed a non-binding letter of intent with Business Development Group Acquisitions, Inc. (BDGA) of Wayzata, MN -- a preliminary step that eventually could lead to BDGA's purchase of Federated's Fingerhut subsidiary and substantially all of Fingerhut's assets.
The possible transaction is subject to additional due diligence by BDGA, as well as BDGA being able to obtain financing necessary to complete the transaction. Under terms of the letter, BDGA must notify Federated in early March of its intent and ability to proceed. Subsequent to providing such notice, a definitive purchase agreement would need to be negotiated between the parties. Further terms were not disclosed.
"We are pleased that we have been able to enter into this letter of intent with BDGA and, although there are no guarantees of a successful outcome, we are hopeful that we will be able to conclude a transaction with BDGA," said Ronald W. Tysoe, Federated's vice chairman. "The sale of Fingerhut as a going concern remains our top priority and, if a sale is feasible, Federated is prepared to move as quickly as possible to get this done."
Tysoe said there are no active discussions with any other parties regarding the acquisition of Fingerhut as a going concern, although the sale process remains open.
Federated, with corporate offices in Cincinnati and New York, is one of the nation's leading department store retailers, with annual sales from continuing operations of more than $15.5 billion. Federated currently operates more than 450 stores in 34 states, Guam and Puerto Rico, under the names of Macy's, Bloomingdale's, The Bon Marche, Burdines, Goldsmith's, Lazarus and Rich's, as well as macys.com and Bloomingdale's By Mail.
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