SAN JOSE (CBS/AP) – Lowe’s executives said Monday that they plan to expand the company’s California presence with an acquisition of Sears spinoff Orchard Supply Hardware Stores for about $205 million in cash.
San Jose-based Orchard Supply filed a voluntary Chapter 11 bankruptcy petition on Monday, so the offer from Lowe’s will become the “stalking horse” bid for an auction of Orchard’s assets.
The “stalking horse” bid sets the floor for an auction process that lets competitors make better offers.
Lowe’s Cos. Inc. said it will acquire at least 60 of Orchard’s 91 stores, and alternative bids must top Lowe’s offer by at least $12 million.
Orchard stores are smaller than Lowe’s locations, and they are mostly in densely populated California markets. The San Jose company was spun off from Sears Holdings Corp. in January 2012.
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