KKR, Apollo in $4.7bn Foot Locker bid

Women’s Wear Daily is reporting that Kohlberg Kravis Roberts could make a bid, possibly with Apollo Management, for shoe retailer Foot Locker in the next two to three weeks.

The magazine also reported that the bid price could be higher than $30, the price mentioned in May when Foot Locker first said it was looking for a leveraged buyout. The total value of such a deal would be roughly $4.7 billion (€3.7 billion).

Apollo and Thomas H. Lee Partners were the first two firms said to be expressing interest in acquiring the company. The Blackstone Group was also said to be considering a bid. 

KKR and Apollo declined comment on the report.

Analysts cite Foot Locker’s ability to consistently generate income as the reason it is looking attractive for a leveraged buyout. The company reportedly generated $260 million in cash in 2005.

Foot Locker shares jumped more than 10 percent Monday following the report.

Private equity has been driven to a number of retailers over the past year. In October, Texas Pacific Group and Warburg Pincus acquired Neiman Marcus, financing the $5.1 billion deal with a 35 percent equity stake. In December, Apax Partners took Tommy Hilfiger private for $1.6 billion. And in February Apollo Real Estate Group partnered with National Realty and Development Corp. to buy Linens N Things. In 2005 KKR was one of several investors that acquired Toys ‘R’ Us in 2005 for $6.6 million.

Foot Locker operates about 4,000 stores in North America, Europe and Australia as Foot Locker, Lady Foot Locker and other brands.