Nov. 18 (Bloomberg) -- Fresh & Easy Neighborhood Market Inc., the U.S. grocery chain owned by Tesco Plc, canceled its proposed auction after receiving no offers to compete with a bid from an affiliate of billionaire Ron Burkle’s Yucaipa Cos.
The company will seek bankruptcy court approval on Nov. 22 to sell virtually all of its assets to the affiliate of Los Angeles-based Yucaipa, according to court documents filed Nov. 15 in Wilmington, Delaware.
Under the proposed deal, a Tesco affiliate would lend the Yucaipa unit $120 million to help finance the acquisition, according to court papers. Tesco would get warrants to buy as much as 10 percent of the reorganized chain’s equity, while Fresh & Easy would get a 22.5 percent stake.
Yucaipa has agreed to take over about 150 of the markets along with the production facility in Riverside, California, where the company produces meals under the Fresh & Easy brand. Fresh & Easy operates 167 stores in the western U.S.
The supermarket chain, based in El Segundo, California, sought bankruptcy protection Sept. 30 listing debt of as much as $1 billion and assets of as much as $500 million.
The case is In re Fresh & Easy Neighborhood Market Inc., 13-bk-12569, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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