J.C. Penney Co.’s lenders have agreed to team up with mall landlords Simon Property Group Inc. and Brookfield Property Partners to buy the bankrupt chain of department stores.
The tentative rescue deal, which would preserve about 70,000 jobs, includes a $300 million equity investment by the landlords, a lawyer for J.C. Penney said at a Wednesday bankruptcy hearing in Texas.
The Wall Street Journal reported earlier that the deal is valued at about $800 million, with the mall owners taking about 490 of the chain’s 650 stores. Lenders would swap some of their debt for control of another 160 locations and the distribution centers, which would be rented back to the landlords, the newspaper reported.
The lender group was already set to take over most of J.C. Penney’s real estate at the outset of the bankruptcy case, with a plan that would have involved spinning the properties into a real estate investment trust and selling the rest of the retailer to the highest bidder. The attempts to reach a sale agreement with outside bidders hit roadblocks as the case dragged on.
Indianapolis-based Simon has veered into retailer ownership in a substantial way in recent years, emboldened by its successful partnership with two other firms to buy the teen-oriented mall chain Aeropostale out of bankruptcy court in 2016.
In February, it teamed with two other firms to buy the once-thriving fast-fashion retailer Forever 21 out of bankruptcy court.