MESA, Ariz. -- Megafoods Stores here is expected to sell its 16 Arizona stores this week -- either to Bashas', Chandler, Ariz., or to another company that may successfully outbid Bashas' in a court auction.
es. The deal also includes the inventory, furniture and fixtures at all 16 stores, equipment from seven other stores that have been closed and the equity value of the stores' real estate.
However, because Megafoods is operating under Chapter 11, the bankruptcy court will establish procedures for an auction in which other bidders can come forward with offers that must be at least $1 million above Bashas' offer. Bashas' also would have the opportunity to raise its bid.
If Bashas' offer is accepted, it would take over the Megafoods locations within five working days, William J. White, Megafoods president and chief executive officer, told SN last week. If another bidder wins out, it would have 10 working days to take over the stores, he noted.
If another company outbids Bashas', it may have to pay Bashas' a $250,000 breakup fee. But White said Megafoods' unsecured creditors have put a motion before the court to disallow the breakup fee "because Bashas' board of directors lowered their bid by $4 million after we had negotiated a deal with the company's management."
White said a handful of potential bidders have called him for information about the stores. However, he declined to name them and said he was not certain whether they would actually make offers for the stores during tomorrow's court session.
According to White, potential bidders could include wholesalers, financial firms or retailers, including groups of retailers that could buy the stores together and then divide them up based on the kind of demographics they serve.
