Landlords Strike Deal to Acquire Bankrupt J.C. Penney
September 09 2020 - 3:08PM
Dow Jones News
By Suzanne Kapner, Alexander Gladstone and Miriam Gottfried
Mall owners Simon Property Group Inc. and Brookfield Property
Partners LP are poised to acquire J.C. Penney Co. out of bankruptcy
in a deal valued at roughly $800 million that will keep the
beleaguered department-store chain alive amid the coronavirus
pandemic, according to people familiar with the situation.
Simon and Brookfield, J.C. Penney's landlords, have reached an
agreement in principle to buy the chain, which filed for chapter 11
in May after the pandemic shut down nonessential shopping across
the country.
The landlords will own about 490 of the retailer's remaining 650
stores, one of the people said. A group of lenders will own 160
locations plus the company's distribution centers in return for
forgiving some of Penney's $5 billion in debt. The landlords will
pay the lenders rent on those 160 stores and distribution centers,
the person said.
Simon, the biggest U.S. mall owner, and Brookfield are paying
roughly $300 million in cash and assuming $500 million in debt, the
person said.
The Wall Street Journal reported in August that Simon and
Brookfield were the leading contenders to acquire Penney in a
bankruptcy auction.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com, Alexander
Gladstone at alexander.gladstone@wsj.com and Miriam Gottfried at
Miriam.Gottfried@wsj.com
(END) Dow Jones Newswires
September 09, 2020 14:53 ET (18:53 GMT)
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