MW’s After Hours Purchase On Hold
NEW YORK – Even as the largest part of Federated Department Stores’ sale of its bridal unit was completed Wednesday, the company said that the sale of the After Hours Formalwear and Mr. Tux stores to Men’s Wearhouse may take longer than expected.
Federated and Men’s Wearhouse said that the Federal Trade Commission had “made a second request for documentation” as part of the Hart-Scott-Rodino Act approval process, which could delay consummation of the transaction through the second quarter of the new fiscal year. The deal, under which MW would acquire 507 After Hours and Mr. Tux stores for pretax consideration of about $100 million, was originally expected to close during the first quarter, which begins in February.
Although neither company indicated the nature of the FTC’s inquiry, Hart-Scott-Rodino scrutiny generally focuses on antitrust or anticompetitive considerations.
However, Federated Wednesday did report that it had closed the sale of its 273 David’s Bridal and 10 Priscilla of Boston stores to an affiliate of Leonard Green & Partners, a private equity group, for $750 million.
Upon completion of the After Hours purchase, Federated expects to garner about $750 million in after-tax net proceeds from the two transactions. David’s Bridal, Priscilla, After Hours and After Hours’ Mr. Tux component were organized as Federated’s Bridal Group and were acquired as part of Federated’s purchase of May Department Stores in February 2005 for $11bn plus about $6bn in assumed debt.
