Back on August 18th I posted that some big players wanted the (great) assets but didnt want to pay shareholders for them... The big money always wins, especially on these overlevered companies.
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Globe says PSG holders warned about getting "hosed"
2016-11-02 08:46 ET - In the News
The Globe and Mail reports in its Wednesday edition that a $575-million (U.S.) bid unveiled Monday for the assets of Performance Sports Group could prove difficult for any other bidders to top. The Globe's Christina Pellegrini and Janet McFarland write that the owner of the Bauer sports-gear name filed for bankruptcy protection Monday, citing a high level of debt and declining sales. The Globe notes that insider Sagard Capital Partners LP and Fairfax Financial Holdings submitted a $575-million joint stalking-horse offer. Legal analyst Joshua Friedman at corporate debt research firm Debtwire says it will be difficult to attract a better offer because of how the Sagard bid is structured, which could leave shareholders with no recovery once all of the company's liabilities are paid off. "It seems to me that [investors] are just going to get hosed," he told The Globe. "I don't know how they overcome the combination of Sagard's and Fairfax's ability to use" the different components of their bid "to really take over the process." Also, once debtor-in-possession (DIP) financing is approved by the courts, Sagard and Fairfax would be allowed to sweeten their offer in the form of a credit bid.