Bed Bath & Beyond begins bankruptcy and takeover loan talks

(Bloomberg) — Bed Bath & Beyond Inc. is negotiating with potential creditors who will finance the company during the bankruptcy proceedings, according to people familiar with the matter.

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The talks include the possibility of a so-called stalking bargain, in which the party would also offer to buy some or all of the company’s assets in the event of bankruptcy, said the people, who asked not to be identified as they discussed the private talks. Negotiations are at an early stage, people say, and conditions may change.

Union, New Jersey-based Bed Bath & Beyond has seen losses spiral out of control as it strives to rebalance its business. In its January 9 earnings report, the company said its net loss widened to $393 million in the three months ended November 26 and said it was considering “all strategic alternatives” to get back on track.

The retailer said last week that those options included the possibility of bankruptcy, a warning that came after it withdrew a bond swap offer.

Bed Bath & Beyond received advice from the law firm Kirkland & Ellis and investment bank Lazard Ltd.

Representatives for Lazard, Bed Bath & Beyond and Kirkland & Ellis did not immediately comment on the situation.

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