FINANCE

OfficeMax gets $129M in proceeds from investment

BY Staff Writer

Naperville, Ill. — OfficeMax has received approximately $129 million in cash proceeds related to its October 2004 investment in Boise Cascade Holdings, LLC. Since 2004, OfficeMax has held two classes of securities in BCH, non-voting equity securities ("Series A Units") and voting equity securities ("Series B Units").

BCH will redeem all of the Series A Units held by OfficeMax for $112 million, equal to the original investment amount of $66 million plus $46 million of total accrued dividends. As previously disclosed, OfficeMax had been recording income earned from the 8% annual dividend yield on the Series A Units as a reduction of operating, selling and general and administrative expenses in its Corporate & Other segment. This dividend income ceased upon completion of the redemption of the Series A Units on Feb. 12.

OfficeMax also continues to hold a 20.4% ownership interest in the Series B Units of BCH, which do not accrue any dividend. OfficeMax has accounted for the Series B Units under the cost method as a $109 million investment on its consolidated balance sheet since October 2004. BCH has declared a distribution of approximately $85 million payable on Feb. 12 to the holders of its Series B Units, of which OfficeMax’s share of proceeds is approximately $17 million. This distribution on the Series B Units will be recognized as income by OfficeMax and will not reduce the $109 million investment amount.

Ravi Saligram, president and CEO of OfficeMax said, "We’re very pleased to have monetized a portion of this non-core Boise asset. Together with the removal of the Lehman-backed timber notes and reducing the unfunded pension liability, we have made great strides in optimizing our balance sheet over the past several months. We are considering the best way to utilize these proceeds to maximize shareholder value."

Following the redemption of the Series A Units and the distribution on the Series B Units, BCH will continue to hold approximately $28 million of cash and own 29,700,000 common shares of Boise Cascade Company (BCC), which completed its initial public stock offering today.

Bruce Besanko, EVP, CFO and chief administrative officer of OfficeMax said, "Following the receipt of these proceeds, we’ll retain our BCH Series B Units which represent an indirect ownership interest of approximately 6 million shares or approximately 14% of the common equity of Boise Cascade Company."

OfficeMax has carried a $180 million deferred book gain on its consolidated balance sheet related to its investment in BCH in October 2004. The redemption of the Series A Units is expected to trigger recognition of a pre-tax operating gain of approximately $68 million representing the portion of the deferred gain attributable to the Series A Units. The remaining $112 million of deferred gain attributable to the Series B Units will remain on OfficeMax’s consolidated balance sheet until such time as the Series B Units are sold or redeemed. OfficeMax does not expect it will be required to pay any cash taxes as a result of the redemption of the Series A Units and the distribution on the Series B Units.

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FINANCE

A&G Realty to manage Bakers Footwear liquidation

BY Katherine Boccaccio

New York — A&G Realty Partners said Tuesday it has been retained by Bakers Footwear Group Inc. to handle the liquidation of its remaining 56 mall stores.

According to A&G, an auction for the store leases is slated for Feb. 18, with a deadline to submit bids to A&G Realty by Feb. 21.

“Bakers’ real estate has begun to create interest among various shoe retailers, particularly those interested in access to premier locations in some of the top malls in the country,” said Michael Jerbich, a partner at A&G Realty Partners, who is managing the court-supervised sale process.

Bakers Footwear Group, based in St. Louis, filed for Chapter 11 bankruptcy protection in October 2012; prior to its bankruptcy, the chain operated 236 Bakers and Wild Pair shoe stores in 37 states.

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News

Kindness pays at Michaels

BY CSA STAFF

In celebration of Random Acts of Kindness Day on Sunday, Feb. 17, Michaels hopes to inspire customers to participate by giving away more than $100,000 in gift cards at its nearly 1,100 U.S. and Canada stores.

This is the second year Michaels will randomly hand out free gift cards in its stores in observance of the international holiday. Gift card recipients will be encouraged to "craft it forward" and exhibit their own random act of kindness towards another person. This year, the craft store is celebrating throughout Random Acts of Kindness Week, Feb. 11 to 17, by asking customers to share their own random acts of kindness on the Michaels Facebook page and to use the hashtag #RAOKDIY when sharing on Twitter and Instagram.

"We’ve heard wonderful stories from our customers and store associates about how inspired they were by the giveaway last year," said Michaels Chief Marketing Officer Paula Puleo. "This year, we’ve asked our customers to share their stories on Facebook, Instagram and Twitter so they might inspire others to embrace the spirit of Random Acts of Kindness Week."

Customers who want to "craft it forward" can find inspiration for Random Acts of Kindness projects to give to others on the Michaels Random Acts of Kindness Pinterest board.

Random Acts of Kindness Day was created by the Random Acts of Kindness Foundation, an internationally recognized nonprofit organization based upon the powerful belief in kindness, and dedicated to providing resources and tools that encourage acts of kindness.

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