Federated extends Fingerhut sale deadline–or does it?

Federated Department Stores</> on March 7 said it gave

Business Development Group Acquisitions (BDGA) at least another week to pull together financing to buy Fingerhut Cos. But Marshall Masko of Wayzata, MN-based BDGA said on March 8 that there had been no firm deadline for this week.

BDGA, an investment firm headed by Peter Lytle, signed a nonbinding letter of intent on Feb. 21 to buy Fingerhut. In addition to acquiring the core general merchandise business, BDGA would be buying Fingerhut’s subsidiary titles, which include apparel mailer Arizona Mail Order and food gifts catalog Figi’s.

“We’re bending over backward to try to make this deal happen,” Federated spokesperson Carol Sanger told CATALOG AGE on March 8. On the other hand, when asked if she was optimistic that BDGA could put the acquisition together by the week of March 18, Sanger said, “I’m not going to characterize it that way. We’re willing to provide the additional time for BDGA to continue its due diligence and line up the financing.”

But that same day, Masko said that reports of a March 8 deadline for a decision “make it seem like we don’t have our act together. We said all along that as we enter the process we would be hitting a series of milestones. The first milestone was met, which involved an overview of the Fingerhut business and whether or not we were still interested in the business.”

The next milestone, Masko told CATALOG AGE, is to perform a “deeper level” of due diligence, which would involve “talking with the banks and our financing partners. And based on what we’ve found so far, we think it’s finance-able.”

Masko added that sometime in the next two weeks due diligence will come to a close as “something more concrete as an agreement between the two parties is made.”

If the BDGA offer falls through, former Fingerhut chairman Ted Deikel and his investment partner, Tom Petters, may be waiting in the wings with a backup bid. Mary Pernula, vice president of marketing for Red Tag, the Eden Prairie, MN-based wholesale apparel trading exchange firm headed by Petters, verified on March 8 that the backup offer made by the group headed by Petters and Deikel is still on the table “for today,” but she wouldn’t comment further.

Deikel told “The St. Cloud (MN) Times” on March 7 that “we will push on [the offer] a little bit—we’re not just going to go sleep and forget about it.”

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