While a U.S. Bankruptcy Court judge has approved Briggs & Stratton’s proposal for a fast-track auction despite objections for creditors, reports Milwaukee Business Journal, a recent court filing shows Generac Power Systems does remain in the running as a potential bidder.
On July 20, when Briggs filed for Chapter 11 reorganization, the company had negotiated an agreements with KPS to buy Briggs for $550 million and would provide $265 million toward debtor-in-possession financing, the Business Journal reports. Briggs and KPS wanted an auction process with bids due by Aug. 28 and an auction conducted on Sept. 1. if any bids exceeded KPS’s bid. A final sale would then be approved by Sept. 11.
The judge approved most of the dates but delayed the hearing until Sept. 15. He also denied objections from the official unsecured creditors committee that includes the federal Pension Benefit Guarantee Corp., retired Briggs’ executives and holders of the nearly $200 million in unsecured notes.
The Business Journal reports that “Generac Power Systems also filed an objection calling for the option of not having to bid for the entirety of Briggs & Stratton's assets. Generac indicated in its objection that it is a potential bidder and “has significant interest in acquiring certain assets.”
According to the article:
Houlihan Lokey, which is the investment banking firm working for Briggs, filed a document Monday stating the firm is cooperating with Generac on a possible bid.
The firm told the Business Journal the Chapter 11 bidding procedures don’t block a possible “partial sale” of Briggs.
Houlihan Lokey “encouraged and facilitated” Generac’s interest and is hopeful the company will submit a bid, he said.
Three days after the Chapter 11 filing, Houlihan Lokey provided Generac with documents on Briggs’ business, a non-disclosure agreement and a term sheet, Peluchiwski said.
Generac signed the non-disclosure agreement and Houlihan Lokey provided additional documents to Generac Aug. 5. Then on Aug. 7, Houlihan Lokey held a one-hour discussion with Generac’s investment banking firm Robert W. Baird & Co., Peluchiwski said.
Generac pressed for additional information on Briggs' business including employee data and a “product development roadmap” for Briggs’ electronic products lines, Peluchiwski said. Houlihan Lokey supplied on Aug. 14 many but not all the documents Generac requested but excluded information Briggs deemed too sensitive for competitive reasons and employee confidentiality, he said.
The full article can be accessed here.
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