Eddie Bauer picked up by Golden Gate Capital in bankruptcy auction

Golden Gate Capital appears to be the victor in a bankruptcy auction for Eddie Bauer Holdings (Pink Sheets: EBHIQ) with an all-cash bid of $286 million — the highest and best offer, according to the retailer. The offer must still get a stamp of approval from the court on July 22. If approved, the transaction is expected to close in early August.

In a statement, Eddie Bauer said the Golden Gate offer would maintain the substantial majority of Eddie Bauer’s stores and employees in a newly formed going concern company. It also noted that the transaction is not expected to result in any distribution to the stockholders of Eddie Bauer Holdings

Eddie Bauer filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Delaware in June with a plan to sell its assets to CCMP Capital for $202 million. The CCMP bid set the floor for the auction.

Among the reported interested companies were Iconix Brand Group (Nasdaq: ICON), VF Corp. (NYSE: VFC), private-equity firm Hilco Consumer Capital and liquidator Gordon Brothers Group.

At the time of the Chapter 11 filing, Eddie Bauer president/CEO Neil Fiske said in a statement that “a crushing debt burden left from the Spiegel bankruptcy combined with the severe, prolonged recession have left us with no choice but to look for ways to restructure the company’s balance sheet.” Former parent Spiegel had filed for bankruptcy protection in 2003, and Eddie Bauer has been an independent company since 2005.

Golden Gate Capital (www.goldengatecap.com) is a private equity firm with $9 billion in capital under management with buyout and growth equity investments across a wide variety of industries. Its consumer and retail portfolio includes Eddie Bauer’s former owner, Spiegel.

Eddie Bauer had $476.1 million in assets and $426.7 million in debt when it filed for bankruptcy protection. Founded in 1920, the company lost money in each of the past three years. It employs 7,700 people in the United States, including several hundred at its Bellevue, Wash., headquarters, plus 933 in Canada.

Earlier this month, Eddie Bauer received final approval from the U.S. Bankruptcy Court in Delaware for $100 million in debtor-in-possession financing and other motions that allowed it to continue operating while awaiting a sale. The Nasdaq Stock market delisted the company in late June.

–Compiled by Wendy Geister

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