Could ABG, With Mall Giants Simon and Brookfield, Snap Up JCPenney?

The roster of potential buyers for J.C. Penney Company Inc. is expanding.

Ten days after news emerged that private equity firm Sycamore Partners is considering a purchase of the bankrupt retailer, a report is circulating that brand management firm Authentic Brands Group is in the middle of discussions with two of America’s biggest mall owners to snap up the storied chain.

According to Bloomberg, which cited people familiar with the matter, ABG might join forces once again with Simon Property Group and Brookfield Property Partners to pull JCPenney out of bankruptcy. Discussions remain fluid, it added, and the future of the beleaguered department store, which is undergoing reorganization after it filed for Chapter 11 protection in mid-May, remains in question.

Should a deal transpire, the acquisition would add another notch in the belt for ABG and the retail landlords: Four months ago, the consortium of buyers became the new owners of teen mall staple Forever 21, which went bankrupt in September. As part of the buyout, ABG and Simon each own 37.5% of the fast-fashion chain, while Brookfield took control of the remaining 25% of Forever 21’s intellectual property and operating businesses.

What’s more, in 2016, ABG and Simon partnered with mall owner General Growth Properties — now owned by Brookfield — to save Aéropostale from liquidation. The purchase saved thousands of jobs and maintained operations at 700 stores around the world, including 400 in the U.S. and Canada.

Separately, an exclusive Reuters report early this month revealed that Sycamore Partners was in preliminary talks to buy JCPenney outright or make an investment in the retailer. It is uncertain how much the private equity firm would be willing to pay for the struggling chain, or whether the talks will result in an agreement.

At the time of its bankruptcy filing on May 15, 118-year-old JCPenney had about $500 million in cash at hand and received debtor-in-possession financing commitments of $900 million. It expects to shutter 242 units, or about 29% of its brick-and-mortar fleet, by February. The company, which employs about 85,000 people, is also in the process of reducing its staff.

FN has reached out to JCPenney as well as Authentic Brands Group, Simon Property Group and Brookfield Property Partners for comment.

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