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Report: Mall Owners Emerge as Possible Saviors for Bon-Ton

With the deadline for entering bids looming, two mall owners emerge as possible suitors for The Bon-Ton Stores.

Two mall owners with ties to the retailer, Namdar Realty Group and Washington Prime Group, are said to be readying a bid to acquire The Bon-Ton Stores out of bankruptcy, according to Reuters. Sources revealed to the publication that under the two firms, the chain would continue to operate as a going concern.

WPG and Namdar, along with its investment partner Mason Asset Management, are said to still be working on a strategy to fund the deal, possibly using their properties as collateral for the financing.

At the same time, a group of investors and liquidators has prepared a $740 million offer to liquidate the business, sources said. The bid is designed to allow for the company’s wind-down and provide its creditors with the option of acquiring both intellectual and physical property associated with Bon-Ton, which they could then monetize.

Bids for the retailer are due on Wednesday but insiders say that date, which was already extended by two days, could be moved out again.

As is the case with many mall owners, WPG has been working to insulate itself from the issues plaguing apparel retailers, especially department stores. The company said 47 percent of its total volume is occupied by lifestyle tenants, including food, beverage and entertainment businesses, according to a presentation made at the Citi Global CEO Property Conference last month. Since 2015, Washington Prime Group has reduced its department store exposure by 26 percent. There are currently 14 locations under The Bon-Ton Stores banner in WPG properties, which is a leading factor in the real estate trust’s interest in acquiring the department store chain, sources said.

Namdar Realty, which is known for acquiring distressed properties, has seen several Bon-Ton properties close in recent months, including a Hershberger’s in The Cache Valley Mall in Logan, Utah; a Bon-Ton in the Phillipsburg Mall in Phillipsburg, New Jersey; and a Bon-Ton in the Steeplegate Mall in Concord, New Hampshire. Bon-Ton still operates additional locations in Namdar properties, including The Shops at Ithaca Mall in Ithaca, New York and Newburgh Mall in Newburgh, New York.

The Bon-Ton, which operates 250 stores, filed for bankruptcy in February.