Sale of Golden Near

Under bidding procedures approved by the bankruptcy court overseeing Golden Books' Chapter 11 filing, any party that wishes to file a competing bid to the $79-million offer made for Golden's assets by DIC Entertainment must file its proposal by July 24. Among the conditions that a competing company must meet is a requirement that its bid include a cash offer that is at least $5.5 million higher than the $69 million in cash offered by DIC (the balance of DIC's offer is a $7-million note and the assumption of $3 million in liabilities). An auction for the assets is set for July 27 and a hearing to confirm the sale is scheduled for August 1.

At the August 1 hearing, any party that has a problem with the winning bid will be able to argue its case before the court. Some bondholders have been unhappy about the terms of the bidding process, believing it will discourage competing offers. Trade creditors, however, are satisfied with it, and are confident they will receive the full $90 million they are owed by Golden through the sale of assets as well as from cash generated by the new company. If any entity other than DIC acquires Golden, DIC is entitled to a $2.5-million break-up fee and as much as $2 million in reimbursement fees.

As Golden nears its end as an independent company, it reported a net loss of $8.8 million for the first quarter ended March 31, 2001, on sales of $25.1 million. In the first quarter of 2000, the company had sales of $36.3 million and a $4.3-million loss. Sales in its children's publishing division fell 25.6%, to $23.8 million, due mainly to $8.9 million in lower sales of Disney-licensed product; Golden canceled its Disney license in 2000, but has the right to sell off existing product until January 31, 2002. Sales of Pokémon materials also fell, although sales of Powerpuff Girls, Scooby-Doo and Barbie licensed product were up.