Orchard Supply bid procedures approved for $205 million sale to Lowe's

By Jim Witters

Wilmington, Del., July 8 - Orchard Supply Hardware Stores Corp. received approval for bidding procedures related to the planned sale of substantially all of the company's assets, according to documents filed July 8 with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Lowe's Cos., Inc. has agreed to acquire the majority of the debtor's assets for $205 million in cash, plus the assumption of payables owed to nearly all of Orchard's supplier partners.

Lowe's does not plan to acquire eight underperforming stores that are conducting going-out-of-business sales.

Asset sale procedures

Under its stalking horse agreement, if Lowe's is not the high bidder for the assets, Orchard would pay it a $6.15 million breakup fee and reimburse up to $850,000 of its expenses.

The bidding procedures call for competing bids to be submitted by 4 p.m. ET on Aug. 9.

The bids must be at least equal to the stalking horse bid, plus the amount of the breakup fee and expense reimbursement and a $5 million overbid amount.

The auction, if needed, is scheduled to begin at 10 a.m. ET on Aug. 14.

Bids at auction would be made in $2 million increments.

A sale hearing is scheduled for 10 a.m. ET on Aug. 20.

Orchard Supply, a San Jose, Calif.-based hardware retailer, filed for bankruptcy on June 17. Its Chapter 11 case number is 13-11565.

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