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KKR, Apollo in $4.7bn Foot Locker bid

KKR has reportedly emerged as the lead contender in the battle to buy the shoe store chain, possibly with Apollo Management.

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.