Private Equity: Real Estate Firms Eye J.C. Penney

Private equity firm and Real Estate Investment Trusts are having discussions about buying J.C. Penney (NYSE:JCP) if the bankrupt retailer does not reach an agreement with creditors.

The department store filed for bankruptcy in May after the spread of the coronavirus forced the retailer to close more than 800 stores across the country. J.C. Penney had been struggling to survive for the past few years, and the virus was the final nail in its coffin.

J.C. Penney Might Be a Target

Sycamore Partners is said to be the leading candidate to buy the company should negotiations fail. Sycamore specializes in retail. The private equity firm owns several retailers, including Dollar Tree, Hot Topic, Staples, The Limited, and several other chains. Sycamore had a deal to buy Victoria’s Secret form L Brands (LB), which fell apart when the chain had to close stores and miss rent payments because of the pandemic.

Another scenario involves Sycamore joining with J.C.Penney’s biggest landlords, Brookfield Asset Management (BAM), and Simon Properties (SGP) to buy the retailer. Wells Fargo (WFC) is also said to be involved in the discussions, although it is unclear what role the bank would play in a deal for the department store.

J.C. Penney is in discussions about handing over control to its lenders in exchange for reducing its nearly $5 billion of debt. This would depend on several investment firms that hold the company’s senior debt and have provided the company’s bankruptcy financing agreeing with the proposal by July 14. If they cannot reach an agreement with the lenders by the date, Penney will have to abandon the reorganization plan and look for a buyer.

The plan being discussed would result in J.C. Penney being split into two companies. One would be a real estate investment trust that would own the company’s property and lease it back to J.C. Penney. The other would operate J.C. Penney’s department store business.

Any reorganization plan or sale of J.C. Penney would require the approval of the bankruptcy court.

Related: ICANN Pauses Sale of PIR to Ethos Capital for 30 days

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Latest Alternative Investment News
Digital Assets: Cryptoassets As A National Currency – “Inadvisable Shortcut,” Says IMF
July 28, 2021     Digital Assets, News

In a blog this week the IMF warned against the use of cryptoassets as a national currency, saying it was a “step too far.” Though cryptos had obvious advantages such…
Alternative Investments/ESG: A Shariah Compliant ETF Tracking China ‘A’ Shares Debuts In Malaysia

Value Partners Group Ltd listed today the VP-DJ Shariah China A-Shares 100 ETF, the world’s first Shariah-compliant A-share exchange traded fund (ETF), on Bursa Malaysia. The ETF provides investors exposure…
Artificial Intelligence: Tably, An AI-Powered App, Can Tell How Your Cat Is Doing
July 28, 2021     Artificial Intelligence, News, which uses AI to improve animal health outcomes, has created Tably, an open beta app that “a cat parent” can download and better understand their pet’s health and mood….
FinTech: Alternative Investments Platform Yieldstreet Funded Over $2 Billion
July 27, 2021     Alternative Investments, FinTech, News

Yieldstreet offers retail investors the opportunity to invest in alternative asset classes such as real estate, marine, art, legal finance, and commercial lending. Products are offered across a range of…