Magazine article American Banker

Bankers Trust Drops Offer for Integrated Resources

Magazine article American Banker

Bankers Trust Drops Offer for Integrated Resources

Article excerpt

For the second time in less than six months, Bankers Trust New York Corp. has withdrawn an offer to buy Integrated Resources Inc. out of bankruptcy court proceedings.

Integrated has been operating under Chapter 11 of the Federal Bankruptcy Code since February 1990.

Bankers Trust's latest offer, announced in November, was for $565 million in cash. It followed an earlier bid of $526 million, which was withdrawn in August. Neither Bankers nor Integrated gave a reason for the pullout.

One unresolved issue concerned Bankers Trust's future ability to enhance the value of Integrated's assets -- mainly deferred fee payments still owed to Integrated by real estate partnerships it formed in the 1980s.

35% Recovery Rate Implied

After subtracting Integrated's cash on the hand, the effective purchase price of the sweetened offer would have been less than $200 million.

The acquisition would have provided Integrated's bank creditors, led by Chemical Banking Corp., with about a 35% recovery rate on their loans to the New York-based financial services company.

At the time of the bankrcuptcy filing, Chemical and Manufacturers Hanover Corp. together held more than $100 million of loans to the company, making them Integrated's largest creditors. The two bank holding companies have since merged.

Bankers Trust has no significant credit exposure.

Sources didn't rule out the possibility that Banker's Trust would return to the bargaining table, but they said it's unlikely. …

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