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.

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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.