Toys ‘R’ Us Canada nixes store auction
Fairfax’s successful offer for 82 stores signals end to doubt plaguing retailer
Toys “R” Us’s Canadian operations have found a safety net months after the retailer’s demise in the U.S. and overseas.
Documents filed in a Richmond, Va., bankruptcy court on Monday revealed the retailer will be cancelling an auction for its 82 Canadian stores and seeking approval on Tuesday to sell them to Toronto-based Fairfax Financial Holdings Ltd., which is involved in property and casualty insurance and reinsurance and investment management.
The auction was triggered by a recent $300-million stalking horse offer Fairfax made that allowed others to make competing bids for the Canadian operations until Monday at 10 a.m. EST, but court filings showed no bidders other than Fairfax registered an offer.
Fairfax’s successful bid signals an end to the uncertainty that has followed the beleaguered company’s Canadian arm since September, when it filed for creditor protection and its U.S. division sought bankruptcy protection. The moves, said to be the product of heavy debt and the rising popularity of ecommerce and electronic- based toys, prompted disappointment from toy lovers and investors alike.
Among the most upset by the company’s demise was Isaac Larian, the executive behind California-based, Little Tikesand L.O.L. Surprise!-maker MGA Entertainment Inc.
He and investors he refused to identify made a bid for the retailer’s Canadian operations, which are run separate from its U.S. dealings, outside of the now-cancelled auction in March, calling Toys “R” Us’s Canadian arm a “good business.”
“They run it efficiently, and have good leadership,” he said. “At the right price, it makes economical sense.” When rumours suggesting Larian’s bid had been rejected started circulating last week, he at first said it was “disappointing,” but as more details about Fairfax’s bid emerged, he appeared to have taken on a new outlook.
“As long as Toys “R” Us and jobs are saved, I’m happy.”