P'tex auction will be a 'long day'

Brent Felgner, September 19, 2003

Wilmington, DE — At least 30 to 50 companies have expressed some interest in going after all or part of Pillowtex, company president and cfo Michael Harmon said last week following a bankruptcy court hearing here.

With a Sept. 29 bid deadline just 10 days away, it's still too early to tell how many of those will translate into credible bids during a scheduled Oct. 2 auction in New York.

"There's been a lot of continuing activity," he said in an impromptu interview. "I think it's going to be a very long day."

Harmon said he was hopeful the auction would result in asset sale prices substantially higher than the $56 million opening bid by GGST, its stalking horse bidder. And ancillary court filings alluded to asset sales hitting $165.5 million, for example, in order for bonuses to kick in.

In the meantime, Credit Suisse First Boston is continuing its efforts to bring additional bidders to the table. But it's equally clear some have arrived of their own volition.

All have remained media-shy, ostensibly because of ironclad confidentiality agreements.

But it's an open industry secret that Springs Industries remains a strong contender with an ongoing interest.

Additionally, global players Broome & Wellington, of the United Kingdom, and Welspun India have also been tracking the bankruptcy closely, with their representatives sitting through hours of hearings to date.

Moreover, Brazilian textiles company Coteminas has had attorneys in the courtroom during some bankruptcy hearings.

And, most recently, New York-based investment company Quadrangle Group has asked to be added to the court's service list.

Quadrangle identifies itself as a $1 billion-plus private investment firm that buys into mature high-growth media companies and investments in a wide range of financially troubled companies.

How many are serious bidders and how many might simply be exploring the competitive landscape?

"It's hard to know anybody's intent when they're doing their due diligence," Harmon said. "All you can do is wait" to see which bids come in.

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