Lenders for J.C. Penney want to bidders to raise their offers as they vie for the bankrupt retailer, according to a Bloomberg report.
The bids under consideration aren’t close enough to the about $2.2 billion of debt the lenders hold after Penney’s filed for bankruptcy in May, according to the report. It cited people familiar with the matter, who said they couldn’t be named because the deals are private. The earlier proposals were about $1.8 billion, according to the report.
There are three separate bids being considered for the department store’s real estate and other assets, the company’s attorney Joshua Sussberg of Kirkland & Ellis said during a court hearing in late July. He did not disclose the names of the bidders or say which offer had been chosen.
The bidders are private-equity firm Sycamore; mall operators Simon Property Group and Brookfield Property Partners that are making a joint bid; and Saks Fifth Avenue owner Hudson’s Bay Company, a person familiar with the talks previously told CNBC.
Penney declined to comment. Representatives from Sycamore, Brookfield, Simon and Hudson’s Bay weren’t immediately available to comment.
Penney was struggling even before the coronavirus pandemic, as consumer shopping habits changed, pushing more sales online and away from department stores. But being forced to have its stores closed for an extended period of time was the final blow for the debt-laden company.
The department store has been trying to renegotiate lease terms with its landlords, and plans to shut about 150 locations and lay off roughly 1,000 workers. At the time of its bankruptcy, Penney employed rougly 90,000 full- and part-time workers.
The report said a bid that saves jobs could be preferable to one that would result in mass layoffs and store closures even if the offer isn’t the most valuable proposal. It cited a 2019 decision to allow former Sears CEO Eddie Lampert to buy Sears Holdings as an example of how that could factor into the process.
Read the Bloomberg full report.
—CNBC’s Lauren Thomas contributed to this report.
