COLUMBUS, Ohio–Following published rumors that Retail Ventures was considering the sale of its Value City Department Stores subsidiary to an investment fund, the off-price giant formally announced its “disposition” of four-fifths of its ownership interest in the department store unit to VCHI Acquisition Co., an entity newly formed by three other funds—VCDS Acquisition Holdings, Emerald Capital Management LLC and Crystal Value LLC.
In a statement issued last night, Retail Ventures said it would receive “no net cash proceeds from the sale [and] will pay a fee of $500,000 to the purchaser.” The company also expects to take an after-tax loss on the transaction, and has issued warrants, or securities, which enable it to purchase 150,000 shares of Retail Ventures’ common stock at a price of $10 per share. The warrants are exercisable within a year and a half of the transaction’s closing date.
Along with the sale, Filene’s Basement, another subsidiary, has entered into a $100 million credit facility with National City Business Credit Inc. This replaces a similar arrangement for $275 million that was terminated on the same day as the transaction.