Oaktree plans to make $1.5 billion bid for Claire’s

By

Robin Driver

Published
Aug 23, 2018

Claire’s Stores Inc. debtholder Oaktree Capital Management is currently attempting to raise $1.5 billion in order to make a bid for the bankrupt tween accessories retailer before August 31st.

 
The bid would go up against a $1.4 billion offer made by Claire’s senior lenders, including Elliott Capital Management, as well as Apollo Global Management, a private equity sponsor that led Claire’s privatization efforts in 2007.
 
Oaktree, which holds $159 million in Claire’s secured second-lien notes has been vocal in its opposition to this debt-for-equity deal since the accessories retailer filed for bankruptcy in March, claiming that it is excessively favorable to Elliott, Apollo and the other lenders involved.

News of Oaktree’s plans came to light when Tom Lauria, a lawyer at White & Case LLP representing Oaktree, stated that the asset management firm had made a bid that would be fully financed in due course at a hearing in US Bankruptcy Court in Wilmington, Delaware, on Friday. As reported by Bloomberg, Lauria added that the firm is “under extreme pressure raising $1.5 billion in cash” before the August 31st deadline.
 
The hearing concerned Claire’s request to extend its exclusivity period, which would prolong the retailer’s exclusive right to file a reorganization plan into October, a motion which Oaktree had objected to on the basis that the expiration of the 120-day period might attract larger bids. The extension was approved by Judge Mary Walrath.
 
Claire’s reported a drop of 0.4% in consolidated same-store sales and losses amounting to $11.6 million in Q1 2018, but aims to continue business as usual in its retail locations throughout the restructuring process.