Shoe manufacturer Steven Madden Ltd. is coming to the aid of a large
shoe store chain (Bakers Footwear Group) that will be profitable for
them in two ways, in addition to saving a large distribution entity
as Bakers has 239 retail stores across the country. The deal evolved
because Bakers required $5 million to settle up with Bank of
America, in addition to needing operating income.
Madden provided the loan at 11% interest over the next decade. Plus
Bakers agreed to a barter-type of agreement by providing Steven
Madden a 20% stake in Bakers, or 1.8 million shares of Bakers stock
to clinch the deal.
Editor’s
note:
This deal reminded us of the agreement super-dealmaker John Malone
of Liberty Media did with Sirius XM Radio, when “blood was running
in the street” back in 2008 and Sirius’ position dictated money fast
in order to survive. Malone loaned Sirius $500 million at 15%
interest (since repaid), and in return received a warrant for
$12,500, that would convert when Malone desired into 40% of Sirius
common stock. That stock (40%) is now valued at an astounding $2.8
billion. (Malone has yet to convert the warrant.)
