J.C. Penney Company, Inc. announced that it has reached an agreement in principle to sell JCPenney through a court-supervised sale process. Brookfield Property Group and Simon Property Group intend to acquire substantially all of JCPenney’s retail and operating assets (OpCo) for $1.75 billion, which includes a combination of cash and new term loan debt.
The agreement contemplates the formation of a separate real estate investment trust and a property holding company (PropCos), which will include 161 of the Company’s real estate assets and all of its owned distribution centers. The PropCos will be owned by the Company’s Ad Hoc Group of First Lien Lenders (First Lien Lenders).
The OpCo and PropCos will enter into a master lease with respect to the properties and distribution centers moved into the PropCos.
“We have determined that an agreement with Brookfield and Simon, as well as the formation of separate real estate investment trusts owned by our First Lien Lenders, is the best path forward to maximize value for our stakeholders, ensure we keep the most stores open and associates employed, and position JCPenney to build on our over 100-year history,” said Jill Soltau, chief executive officer of JCPenney.