(Reuters) – Hedge fund Mudrick Capital Management LP asked Neiman Marcus Group’s independent directors on Tuesday to explore a combination with rival department store chain Saks Fifth Avenue, challenging the company’s plan to reorganize under bankruptcy protection.
FILE PHOTO: The signage outside the Neiman Marcus store is seen during the outbreak of the coronavirus disease (COVID-19) in New York City, U.S., April 19, 2020. REUTERS/Jeenah Moon
A lawyer for Mudrick, which holds portions of Neiman Marcus’s roughly $5 billion of debt, wrote in a letter to the directors that a sale or merger with Saks would result in better financial recoveries for creditors than the company’s current plan to restructure and hand control to senior lenders.
Neiman Marcus [NMRCUS.UL] filed for bankruptcy last week after prolonged store closures in response to the COVID-19 pandemic resulted in plunging sales.
The letter, reviewed by Reuters, suggests that combining the two luxury retailers would create between $2.8 billion and $4.7 billion of value. That could