NEW YORK (HedgeWorld.com)--VGACS Acquisition Inc., a unit of statistical arbitrage hedge fund D.E. Shaw & Co. LP, agreed to buy FAO Inc.'s FAO Schwarz stores in New York and Las Vegas, its catalog and Internet business and other assets for US$20 million.
The deal will keep the flagship Fifth Avenue toy store in New York and the Forum Shops store at Caesar's Palace in Las Vegas open, although FAO Inc. officials said in a statement that both stores would close temporarily for remodeling after the remaining inventory is sold.
The New York and Las Vegas stores should reopen before summer, FAO Inc. officials said in a statement.
The deal is subject to bankruptcy court approval, which FAO Inc. officials said they hope to get in January. FAO Inc. filed for Chapter 11 bankruptcy protection in December. The King of Prussia, Pa.-based company had emerged from an earlier Chapter 11 filing in April.
Published reports indicated the deal with D.E. Shaw came at the last minute and probably saved the New York and Las Vegas stores from permanent closure. Real estate buyer Harry Macklowe, who owns the General Motors building in which the New York FAO Schwarz store is located, had planned to buy that store and the one in Las Vegas for US$23 million.