August 1, 2003
Ross to Purchase Burlington for $620.1 Million
The Associated Press reported on Monday that WL Ross & Co. LLC was declared the winner of an auction for bankrupt Burlington Industries with an offer of $620.1 million. The U.S. bankruptcy court in Delaware was scheduled to approve the sale between the two companies on Thursday. At press time, a final decision was still forthcoming.
When the auction began Monday in the offices of a New York law firm, Ross was the preferred bidder, with an offer of $608 million. Subsequent bidders were required to top the Ross offer by at least $3 million and to pay Ross a breakup fee of 1 percent of the purchase price. After six hours of bidding, Ross remained the high bidder.
Ross? plan for Burlington includes selling the company?s Lees Carpet business to carpet maker Mohawk Industries, Inc. Mohawk has agreed to pay about $352 million for the purchase of this entity.
According to Wilbur L. Ross, chairman of WL Ross & Co. LLC, ?We and our partner, Mohawk Industries, Inc., are delighted to have won the bidding for Burlington Industries at a price of $620.08 million, subject to adjustment. We are delighted to honor Burlington?s commitments to the line executives and the other employees who stayed loyal throughout the bankruptcy. No longer will they or Burlington?s customers or vendors have to worry about its financial viability.?
Burlington, one of the world?s most diversified marketers and manufacturers of softgoods for apparel and interior furnishing, once employed more than 80,000 people in 149 plants, and its stock traded at more than $80 a share. The company now has about 7,600 workers at 10 plants, including six plants in North Carolina.
Burlington filed for Chapter 11 protection from its creditors in November 2001, with $1.1 billion in debt. Since then, the company has laid off thousands of workers, closed plants and sold unprofitable businesses.
Staff contact: Rita Kourlis Samuelson, ext. 29