Federated Department Stores Inc. and Business Development Group Acquisition Inc. (BDGA) have terminated negotiations for the sale of Federated subsidiary Fingerhut to BDGA.
The parties cited a combination of factors that contributed to ending intense and lengthy negotiations including a difficult economic environment for acquisition financing, according to the two firms.
“Federated is going to pursue the potential sale of individual Fingerhut assets to third parties, with an emphasis on preserving as many jobs as possible in the process,” Federated vice chairman Ron Tysoe said in a statement. “We will be proceeding with the wind down of the Fingerhut catalog operation over the next 30 days.”
The assets include ongoing catalog subsidiaries Arizona Mail Order, Figi’s and Popular Club and a Fingerhut catalog customer file of more than 4 million.
The disposition of Minnetonka, NM-based Fingerhut’s assets are expected to generate about $1.1 to $1.3 billion of after-tax cash proceeds over the next four years, the company said.
Fingerhut employed more than 6,000 employees and every effort is going to be made to “help them through this process,” said spokesperson Ben Sauko.
While a number of other players had emerged to bid for Fingerhut, no other potential buyers interested in purchasing Fingerhut as a going concern have been identified, Tysoe said.
Federated announced in January that it planned to liquidate Fingerhut. BDG, Wayzata, MN, had signed a letter of intent in mid-February to purchase all the Fingerhut companies as one entire entity.
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