Deal to merge Toys R Us’ Australian operations with its Asian business and sell them to a new owner looks set to save thousands of jobs.
Toys R Us is closing all 735 of its stores in the US, and is also shuttering its 75 stores in Britain. However, the chain is working with global restructuring giant Lazard to find new owners for its operations in Australia, Asia and Canada.
Sources close to the process told Fairfax Media there had been at least a dozen preliminary offers received for the 400-store Asian business, most of which also included the Australian operations.
Toys R Us’ Australian and Asian divisions have been run as separate entities, with the Asian business operating as a joint venture 15% owned by Hong Kong’s Fung Group.
Fung Group has considered buying the 85% of Toys R Us Asia it does not already own and has also helped solicit bids from Chinese private equity firms, according to Bloomberg News.
A lawyer for Toys R Us told a bankruptcy court in the US last week it had received multiple bids of over $1b ($1.29b) for the Asian business.
The source who spoke to Fairfax Media on the condition of anonymity said it was still possible an offer would be accepted for either the Australian or Asian businesses on their own.
Those running the deal were confident of securing new owners within the next six to seven weeks, the source said.
Toys R Us Australian stores have continued to trade through the process. They have been discounting heavily, and last week permanently reduced prices on more than 300 products and took 25% off clearance items.
One major Australian supplier said that the chain’s local management had agreed to settle outstanding accounts with nervous suppliers, who were worried about being left with unpaid invoices in the advent of a collapse, and was now paying for orders upfront.