A billionaire toy maker said he had submitted a bid for Toys “R” Us, even after his public crowdfunding campaign to salvage parts of the retail chain failed to gain much traction.
Isaac Larian, founder of Bratz dolls maker MGA Entertainment Inc., said he offered $675 million for the U.S. stores of Toys “R” Us, as well as $215 million to buy its Canadian stores. Toys “R” Us is winding down its U.S. business while bankruptcy proceedings continue.
In an interview Friday, Mr. Larian dismissed suggestions that the bid was a publicity stunt and said Bank of America Corp. and UBS Group AG are lining up financing for his bid.
“I’m making a cash deposit today and have a letter from my banks that I have the funds to do this,” Mr. Larian said.
A Toys “R” Us spokeswoman declined to comment on the matter.
A UBS spokeswoman and a Bank of America spokesman declined to comment.
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The retail industry is undergoing another major shift — to e-commerce. How did we get here? Photo: Associated Press
It is unclear if other parties are interested in the assets. Separately, the toy retailer’s bankruptcy attorney said in court Wednesday that the company had received multiple bids of more than $1 billion for a majority stake in its Asian business.
Mr. Larian’s bid faces hurdles, including whether other toy companies would want to work directly with a retailer controlled by a competitor, in what is a notoriously secretive and competitive industry. Mr. Larian said Friday that he wouldn’t be involved in day-to-day operations at Toys “R” Us were his bid to succeed.
Time is also an issue as the company is currently in the process of liquidating its U.S. stores. Lawyers for Toys “R” Us will also have to evaluate Mr. Larian’s offer to determine if it is a “qualified bid” under the court-approved auction procedures.
Mr. Larian launched a $1 billion crowdfunding plan last month to save at least a portion of the retail chain. So far the effort has raised $59,000, on top of the $200 million he said he already raised toward the goal from himself and traditional investors. He had set a deadline of May 28 to raise the funds for the bid.
Toys “R” Us filed for bankruptcy protection in September after struggling with more than $5 billion in debt from a leveraged buyout. It also was squeezed by competition from Amazon.com Inc. as more parents shop online, as well as by discount retailers such as Walmart Inc.
Toy makers have long relied on Toys “R” Us to carry a broader selection of merchandise that has helped uncover hot new products and help smaller companies get their footing. Losing such a retailer, Mr. Larian said, would be detrimental.
“I think Toys ‘R’ Us is important for the whole, goddamn toy industry,” Mr. Larian said.
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