Tips to Keep Cloud Storage Safe and Secure
- September 9, 2024
- 0
Big Lots files for Chapter 11 bankruptcy and secures $707.5M to support operations. Nexus Capital set to bid in a court-supervised auction.
Big Lots, a U.S. discount home goods retailer, has begun bankruptcy proceedings under Chapter 11, securing $707.5 million to support its operations and facilitate the sale of its business to Nexus Capital, a private equity firm. According to a filing with the bankruptcy court in Delaware, Big Lots listed its assets and liabilities in the range of $1 billion to $10 billion and has between 5,001 and 10,000 creditors.
Nexus Capital as “Stalking Horse Bidder”
As part of the bankruptcy process, Nexus Capital has been named the stalking horse bidder in a court-supervised auction, which means their bid will serve as the starting offer that other potential buyers must surpass if they wish to acquire the company. The deal is expected to close in the fourth quarter of 2024, should Nexus emerge as the winning bidder.
A stalking horse bid is a strategic offer that sets a minimum bid for the company or its assets, providing a baseline for the auction and preventing the assets from being undervalued.
Financial Struggles and Bankruptcy
Big Lots has faced significant financial struggles in recent quarters due to declining sales, which have placed immense pressure on its balance sheet. The company, which operates approximately 1,400 stores across the U.S. and employs more than 30,000 workers, has been grappling with challenges that led to its decision to file for Chapter 11 protection.
Despite these struggles, Big Lots reported that its second-quarter results are in line with previous guidance. The full results, originally slated for release on Sept. 6, will now be disclosed on Sept. 12.
What’s Next for Big Lots?
The bankruptcy filing allows Big Lots to restructure its operations while continuing to serve its customers during the auction process. If Nexus Capital’s bid is accepted, the retailer will undergo a significant transition under new ownership, although the timeline for this process is set for late 2024.
The announcement marks another chapter in the ongoing saga of traditional brick-and-mortar retailers facing financial difficulties due to shifting consumer behavior and increased competition from e-commerce giants.
