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Tesco-owned Fresh & Easy canceled its proposed auction and will seek bankruptcy court approval to sell just about all of its assets to an affiliate of the Yucaipa Cos. after it received no competing bids, according to published reports.
Yucaipa has agreed to take over about 150 Fresh & Easy stores, along with the production facility in Riverside, Calif., where the company produces its private label items.
According to reports, the deal stipulates that a Tesco affiliate would lend the Yucaipa unit $120 million to help finance the acquisition, according to a court filing made last week. Tesco would get warrants to buy as much as 10 percent of the reorganized chain’s equity, while Fresh & Easy would get a 22.5 percent stake.
Fresh & Easy operates 167 stores in the western U.S.