FRUIT COULD BE LATEST ON BUFFETT'S TABLE
nypost.com
By ERICA COPULSKY
October 12, 2001 -- Is billionaire investor Warren Buffett interested in helping Fruit of the Loom out of bankruptcy? Some observers close to the process think so.
Fruit of the Loom, the troubled underwear maker trying to emerge from bankruptcy, has turned away bids from two bidding consortiums in favor of a mysterious buyer.
A Fruit of the Loom spokeswoman declined comment, as did a spokeswoman for Buffett's Omaha-based Berkshire Hathaway.
Last month, a Russell Corp.-Blackstone Group partnership and a Gildan Activewear Inc.-Texas Pacific Group team were told by Lazard Freres, Fruit of the Loom's financial adviser, they had not been selected as the preferred buyer of the underwear maker, sources said.
Both bids were characterized as in the range of $800 million to$900 million. but it is unclear how much of the value being paid would be in stock, cash or debt, or how much of the company's liabilities would be assumed.
In Fruit's disclosure statement filed on March 22, Lazard estimated a reorganization value in the range of $920 million to $1.15 billion.
While the company is mum on the mystery buyer's identity, sources say all signs point to Buffett's investment company.
Berkshire has invested in Fruit of the Loom before. In 1985, it accumulated a 6 percent stake in Fruit's former owner, Northwest Industries. The Oracle of Omaha is known for investing in brand names.
What's more, Buffett is said to have a longstanding relationship with John Holland, Fruit's executive vice president of operations, who spent 34 years at Fruit until his retirement as president in 1996. Holland was brought back to help the company work its way out of bankruptcy.
According to one source, Fruit management went out to Omaha to meet with Berkshire in August.
Berkshire would be an attractive buyer for Fruit of the Loom. Unlike the other bidders, Berkshire doesn't need to get shareholder votes or board approval to close the deal. It also doesn't have to raise financing or worry about antitrust issues.
However, in the wake of the Sept. 11 terrorist attacks that have roiled the markets, sources said any possible deal for Fruit of the Loom is far from final. Meanwhile, the company could always proceed on its own with its proposed reorganization plan. |
