HUNTERSVILLE, N.C. — American Tire Distributors Inc. (ATD) will not auction its assets as planned Jan. 13.
The company informed the U.S. Bankruptcy Court for the District of Delaware that it didn't receive any qualified bids as of the Jan. 10 deadline and, therefore, would proceed with the "stalking horse" asset purchase it arranged in November with a group lenders.
A stalking horse purchase agreement generally sets a minimum price for a company's assets, used as the starting bid in a court-ordered auction. The stalking horse bidder makes a binding offer to purchase the assets, conditional on the company not receiving a better offer.
The move often is made to protect a debtor from unreasonably low bids for the assets. A stalking horse bidder is offered incentives, such as expense reimbursements and breakup fees, to secure the deal.
ATD will ask U.S. Bankruptcy Judge Craig T. Goldblatt to approve the stalking horse sale during a hearing scheduled for Jan. 16.
ATD, the largest independent wholesale tire distributor in the U.S. with 2023 sales of $5.7 billion, previously identified the lenders as Guggenheim Partners Investment Management, L.L.C.; KKR, Monarch Alternative Capital L.P.; Sculptor Capital Management Inc.; and Silver Point Capital, L.P. They are collectively called the Ad Hoc Lender group.
