Today at 5:00 p.m. Eastern is the deadline for Bed Bath & Beyond’s (OTCMKTS:BBBYQ) debtors to select a stalking horse bid or bids for some or all of Bed Bath’s assets. A stalking horse bid acts as an initial reserve bid that cannot be undercut. Debtors of the company may select one or more stalking horse bids for some or all of the assets.
Back in April, this embattled retailer announced that it had filed for Chapter 11 bankruptcy protection and would begin the process of winding down operations. To support operations during the process, Bed Bath received $240 million in debtor-in-possession financing from Sixth Street Specialty Lending.
Once the stalking horse bid selection is complete, the final deadline for which all binding bids much be received is June 7. Let’s get into the details.
Dear BBBYQ Stock Fans, Mark Your Calendars for June 7
On June 7, bids must be received by 12:00 p.m. Eastern. As of now, its not exactly clear who will place a bid. However, as a retailer with name-brand recognition, its likely that several entities will be eyeing a Bed Bath & Beyond bid. After the final bids have been received, an auction will be held on June 14 if necessary at 10:00 a.m. Eastern in New York, New York.
Following the completion of the auction, any objections to the sale must be filed to the court by June 19. Finally, the hearing to consider the approval of the winning bid or bids will take place on June 21, or “soon thereafter as the Debtors may be heard.”
Meanwhile, shares of BBBYQ stock have surged higher by about 150% in the past month. BBBYQ has become somewhat of a staple among the meme stock crowd, which has placed confidence in the success of the auction process. According to The Street, many short sellers decided to cover their positions once Bed Bath announced it had filed for bankruptcy. With shares extremely close to $0, the potential for downside becomes less attractive.
According to Fintel, BBBYQ currently carries a cost to borrow (CTB) fee of 8.3%. That is higher than the average CTB fee but still relatively subdued given Bed Bath’s precarious situation.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
