Toymaker rallies industry to make a bid for Toys ‘R’ Us Canada
NEW YORK— MGA Entertainment Inc. is trying to organize a group of fellow toymakers to make a bid for the Canadian operations of Toys “R” Us Inc., the industry giant that appears to be headed toward liquidation.
The group also plans to perform due diligence on Toys “R” Us’s U.S. business, with the hope of keeping some of its more than 700 locations open, said Isaac Larian, MGA’s founder and chief executive officer.
“If there is no Toys “R” Us, I don’t think there is a toy business,” Larian said in an interview.
“At the right price, it makes economical sense.”
Larian said he would put his own money into the effort and a bid will be made on Thursday. That’s when Toys “R” Us has a hearing in bankruptcy court. He declined to say how much money the group has at its disposal, but said that it hired UBS Group AG as an adviser. Moinian Group, a New York-based real estate developer, is working with MGA on an offer, CEO Joseph Moinian said in an interview.
The U.S. unit has stopped paying vendors in recent days and has been making preparations for winding down the business. Toys “R” Us entered bankrupt- cy in September and has struggled to find a buyer or reach a debt-restructuring deal with lenders.
The Canadian division, which has about 80 stores, filed for bankruptcy along with the U.S. unit. But it was in better financial health and expected to find a buyer for some of its assets.
“Canada is a good business,” Larian said. “They run it efficiently and have good leadership.”