Federated Department Stores Inc. announced that it has signed
a non-binding letter of intent with Business Development Group
Acquisitions Inc. of Wayzata, MN, to purchase Federated's
Fingerhut subsidiary.
Business Development Group Acquisitions is an investment company that specializes in turnarounds.
Neither company would release further details. They said the transaction is subject to additional due diligence by Business Development Group as well as the group’s 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.
Federated said in January it was planning to close Fingerhut because it no longer fit Federated’s strategic goals. Executives at that time said they were pessimistic about finding a buyer.
"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," Ronald W. Tysoe,
Federated's vice chairman, said in a statement released with the announcement. "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."
Federated bought Fingerhut in 1999 hoping to take advantage of its web and catalog expertise as Federated moved into e-commerce.
Back...
