Brookfield Said to Weigh Bid for Troubled Performance Sports

  • Former chairman said to plan separate bid for company’s debt
  • Brookfield is second-largest Performance Sports shareholder

Brookfield Asset Management Inc., Canada’s largest alternative-asset manager, is weighing a bid for Performance Sports Group Ltd., the embattled maker of the Bauer and Easton brands, according to people familiar with the matter.

Brookfield has accumulated a 13.2 percent stake in the Exeter, New Hampshire-based company in recent months, setting the stage for a formal takeover bid for the company, said the people, who asked not to be identified as the plans aren’t public. Brookfield is Performance Sports’ second-biggest shareholder behind Sagard Capital Partners, according to data compiled by Bloomberg.

Performance Sports said in a statement that while it continues to hold discussions with advisers, interested parties and stakeholders as part of a strategic review, no deal has been reached with a third party.

“Until such time as it is appropriate to make a public announcement on any potential transaction, the company will not comment further on this matter,” it said in the statement.

Performance Sports shares rose nearly 16 percent in trading to $4.16 apiece in New York at 11:25 a.m. before being halted.

A spokeswoman for Brookfield declined to comment.

Shares in Performance Sports have fallen about 63 percent this year amid an investigation into the company by the U.S. and Canadian securities regulators. The probe was announced two days after the company delayed reporting its earnings amid an internal investigation.

Performance Sports, which traces its roots back to 1927 and the development of the first ice-skating boots with blades attached, touched a market valuation of more than $1 billion in May 2015. It was valued at about $184 million at close Monday.

In August, the company said it hired Centerview Partners to advise on a strategic review. It also said it had agreed to an extension with its lenders through Oct. 28 to file its earnings under current credit agreements.

Should it file for creditor protection after that date, former chairman Graeme Roustan is said to be seeking financial backing to launch a bid for Performance Sports’ roughly $440 million in debt, then take control of the company through a restructuring, according to two of the people.

Before it's here, it's on the Bloomberg Terminal.