Sycamore Partners, a private equity firm, announced a bid for Aeropostale Inc (OTCMKTS:AROPQ) during the company’s bankruptcy auction on Monday.
It’s unknown how much Sycamore bid for Aerpostale, but it may have been $151 million. This is how much the bankrupt company owes Aero Investors and MGF Sourcing Holdings. These two are affiliates of Sycamore and it could have used the debt to make a credit bid for AROPQ.
Aeropostale specifically tried to block Sycamore’s ability to make a credit bid last month. It sought the block in court and argued that the two affiliates contributed to its bankruptcy. However, a judge rejected this attempt. The private equity firm didn’t confirm if Monday’s offer at the auction was a credit bid, reports Reuters.
“Sycamore looks forward to participating in a fair and robust auction that maximizes the value of the Aeropostale’s assets for the benefit of all of its creditors,” a spokesman for Sycamore told Bloomberg.
There was a possibility that some Areopostale stores would survive the bankruptcy, but that doesn’t seem to be the case now. Investment firm Versa Capital Management was reportedly planning to make a bid for the company and keep 500 stores open. The bid was never made and AROPQ will likely be liquidated.
Aeropostale announced in early March that it’s Board of Executives had approved efforts to explore its financial options. One month later the company filed for Chapter 11 bankruptcy protection. At the time of its bankruptcy filing, AROPQ said it wanted to take care of the problems it was having with Sycamore.
AROPQ stock was down 15% as of Tuesday morning.
More From InvestorPlace:
- 7 Companies That Could Go Bankrupt Soon
- The Best ETFs: A Special Report
- 7 Rare Value Stocks in This Overpriced Market