Golfer's Fund Bids For Tablet Maker
31 Dezembro 2015 - 6:02AM
Dow Jones News
(FROM THE WALL STREET JOURNAL 12/31/15)
By Stephanie Gleason
A hedge fund founded by Greg Norman, the Australian golf great
known as "The Great White Shark," is bidding $10 million for the
bankrupt manufacturer of the Nabi children's tablet.
Great White Shark Opportunity Fund LP, a hedge fund founded by
the golfer in 2013, made an 11th-hour offer Wednesday for Fuhu
Inc., topping an initial offer from children's retail giant Mattel
Inc.
The tablet maker selected the fund, an investment arm of Mr.
Norman's sprawling Great White Shark Enterprises, as lead bidder
for its business at a hearing in U.S. Bankruptcy Court in
Wilmington, Del.
The fund also has agreed to finance Fuhu's bankruptcy case with
a bankruptcy financing package.
The entry of Mr. Norman's fund sets the stage for a bidding war
over Fuhu, whose lawyers spent most of Wednesday in court fighting
for the right to conduct an auction at all.
One of the tablet maker's lenders had argued that the company
would bring in more money to lenders if it was sold off in pieces
rather than put on the auction block as a going concern.
Peace broke out, however, when Fuhu, its lenders and Mattel
agreed to name Mr. Norman's hedge fund as stalking horse, or lead,
bidder.
As part of its offer, the Great White fund agreed to allow Fuhu
to spend $700,000 in cash it has on hand to pay down lenders,
satisfying that group's objections.
The Great White offer also doesn't include a breakup fee and
assumes customer warranties on Fuhu's Nabi tablets designed to
usher children safely into the online world.
The 60-year-old Mr. Norman, who won two majors in his career
with aggressive play that resulted in his nickname, now lends his
name to golf courses, clothing, wine varietals, eyeglasses, a
restaurant and a line of Wagyu steaks, all part of his Great White
Shark Enterprises. He began the Great White fund in 2013 with $75
million.
Great White's offer will be tested during a Jan. 20 auction. The
rules governing the auction and the bankruptcy-financing package
still require court approval. Bankruptcy Judge Christopher Sontchi
set a Tuesday hearing for the issues.
Fuhu entered chapter 11 earlier this month, battered by a
dispute with its supplier and running out of money. As previously
reported, Fuhu blames the world's largest contract manufacturer,
Foxconn Technology Group, formally called Hon Hai Precision
Industry Co., for late delivery of its tablets that damaged its
2014 holiday sales.
Foxconn had declined to comment, citing "a strict company policy
of not commenting on any matters related to current or potential
customers, or any of their products."
Earlier this year, Foxconn, which also is an investor in Fuhu,
cut off the supply of Nabi-branded tablets, leaving Fuhu struggling
to fill the orders that came in this year from big-box retailers,
court papers say.
Fuhu's tumble into bankruptcy marked a dramatic reversal for the
company, whose children's technology business brought in revenue of
more than $195 million in 2013.
The startup topped Inc. Magazine's fastest-growing private
company in America list two years running, in 2013 and 2014. Forbes
magazine named Fuhu the most promising company in America in
2014.
(END) Dow Jones Newswires
December 31, 2015 02:47 ET (07:47 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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