Judge Gives Formal Approval to Schwinn Sale
CHICAGO (AP) _ A federal bankruptcy judge on Tuesday gave final approval for Schwinn Bicycle Co.’s $60 million sale to takeover king Sam Zell’s company.
Schwinn, its lenders and official creditors had asked the judge to decide by Tuesday whether the purchase from the Zell-Chillmark Fund would be accepted. The Chicago-based fund that buys troubled companies had previously made an unsolicited $40 million offer, which Schwinn rejected.
Edward Schwinn, the Chicago bicycle company’s president and chief executive, later accepted the Zell offer after the fund offered to eliminate $20 million of Schwinn’s debt. Schwinn said the move saved the company from selling off assets piecemeal.
Arnold H. Dratt, Schwinn senior vice president, said Schwinn agreed the sale should go through, even though it had been in talks as late as last week with several other companies about a buyout.
″It was substantially more than the initial bid,″ he said. ″I felt this bid was fair and should be accepted.″
Under a preliminary agreement on Jan. 7, Judge Jack B. Schmetterer gave other companies time to put in competing bids for Schwinn’s assets. The bids were to have exceeded the Zell-Chillmark bid by at least $4 million.
Susan Loewe, a spokeswoman for Zell-Chillmark, said no other prospective buyers came forward in court Tuesday. About 500 prospective bidders reportedly were interested in the company.
The buyout will be completed through a joint venture with Scott Sports Group, company officials said. Scott USA makes mountain bikes and accessories, ski poles and goggles and motor cycle goggles and accessories.
″Schwinn is one of the greatest brand names in sporting goods, and is the oldest and best-known American bicycle company,″ Sam Zell, a general partner of Zell-Chillmark, said in a statement. ″Scott has proven itself to be extremely successful in marketing bicycles and winter sports equipment. The combination will be unbeatable.″
Schwinn filed for Chapter 11 bankruptcy protection Oct. 7. The 98-year-old company’s headquarters will remain in Chicago and will keep its brand name, Zell-Chillmark officials said.