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Irvine Firm Makes Bid for Converse

Acquisitions: It's a rival offer to another company's, and a bankruptcy judge now delays proceedings.

April 10, 2001|From Bloomberg News

American Sporting Goods Corp. in Irvine has submitted a competing bid to buy Converse Inc., an athletic footwear maker that filed for bankruptcy earlier this year.

The offer prompted a Delaware bankruptcy judge on Monday to delay Footwear Acquisition Inc.'s planned $117.5-million purchase of Converse, which is known for its All-Star brand sneakers.

U.S. District Judge Sue Robinson said she was postponing the sale to allow American Sporting Goods time to investigate Converse's finances and better define its offer. Robinson took the step Monday in a hearing to seek approval for the sale to Footwear Acquisition.

"I want to make sure [Converse] has the opportunity to review the offer and make sure it's using its best judgment" before committing to the Footwear Acquisition transaction, Robinson said. She scheduled another hearing for Thursday afternoon.

The North Reading, Mass.-based company, which traces its history to Marquis Converse's rubber firm in 1908, sought bankruptcy protection in January, listing $202 million in assets and about $226 million in debts.

American Sporting Goods' lawyer, William B. Wachtel, testified that the company and affiliates could match the Footwear price and add "$15 million to $20 million" in equity, notes and perhaps cash. The Irvine company makes footwear under the Avia, Nevados and Turntec brands.

Converse lawyers questioned whether Footwear has firm financing and suggested that it should have taken part in the March auction that resulted in the acceptance of Footwear's offer.

Privately held American Sporting Goods, headed by Chief Executive Jerry Turner, is one of the top six U.S. sports shoemakers. It bought the Avia line from Reebok International Ltd. in 1996.

Shares of Converse, which reported $252.2 million in fiscal 1999 sales, fell a penny to 17 cents in over-the-counter trading. The shares rose to a 52-week high of $1.12 last August.

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