Deal Dispatch: Saks Faces A Luxury Liquidity Crisis, Soho House Gets Quiet

Barely a year after Saks Global Enterprises splurged $2.65 billion on Neiman Marcus, the honeymoon is already over—and the bill has arrived. Lenders are now in talks about whether to inject more capital to keep the luxury department store empire afloat amid a potential bankruptcy.

The drama has put executive chairman Richard Baker back in the spotlight, along with his well-documented taste for bold real-estate-style bets in retail. Some have paid off, others have ended in bankruptcy filings and shuttered chains—and critics are now adding the Saks–Neiman deal in the messy column. Moody's had already flagged the acquisition loans as highly risky and doubted the combined company from day one.

According to Bloomberg, the plan was to revive Saks, Neiman Marcus and Bergdorf Goodman by cutting costs, upgrading tech and squeezing better terms from vendors. Instead, vendors began slowing shipments after Saks fell behind on payments, then stunned suppliers further by asking to stretch past-due bills over a year—an awkward move for a so-called luxury retailer.

Other Items From The Bankruptcy Block

• First Brands Group launched a sale process as part of an effort to emerge from its multibillion-dollar Chapter 11 bankruptcy.

• Taste of Belgium has put itself on a financial diet, filing for Chapter 11 bankruptcy protection in what it says is a move to keep the waffles coming—not to shut down the kitchen. The restaurant group, which has already closed eight locations in recent years, including its original spot, will continue operating at least three restaurants. Founder Jean-François Flechet stressed that the filing is about survival, not surrender, pointing to lingering pandemic fallout, inflation, shifting dining habits and those ever-painful delivery app fees.

Updates From The Block

• Soho House's (NYSE:SHCO) bid to slip quietly back into private life hit an awkward speed bump. Lead investor MCR Hotels admitted it can't come up with its full $200 million equity check on schedule. The hiccup is particularly uncomfortable given that just months ago, MCR led a deal to take the members-only club private at a $2.7 billion enterprise value. Shareholders are still expected to vote in favor of the take-private plan, but whether MCR can eventually settle the tab remains an open question.

• Taiwan-based biotechnology firm SL Bio Ltd. has filed a Form F-4 with the U.S. SEC to advance its merger with Horizon Space Acquisition II Corp. (NASDAQ:HSPT), a deal that would take the company public via a SPAC rather than a traditional IPO.

• Snowflake (NYSE:SNOW) offered to buy Observe, a San Mateo, California-based company, according to TechCrunch.

• Rio Tinto (NYSE:RIO) confirmed it is in early-stage talks with Glencore (OTC:GLNCY) about a potential merger involving part or all of their businesses, possibly structured as an all-share acquisition via a court-approved scheme of arrangement. The miner emphasized that no offer has been made, terms are uncertain, and it retains flexibility on structure and consideration. Under UK takeover rules, Rio Tinto has until Feb. 5 to announce whether it will make a formal offer or walk away. If completed, the deal would rank as the mining industry's largest, creating a combined group with an enterprise value of more than $200 billion.

• Pharmaceuticals giant Merck & Co. Inc. (NYSE:MRK) is reportedly in talks to acquire cancer drug-maker Revolution Medicines Inc. (NASDAQ:RVMD) in a deal potentially valued at between $28 billion and $32 billion. The deal is yet to be finalized and any potential tie-ups are weeks away, according to a report by the Financial Times.

• Chevron Corporation (NYSE:CVX) and Quantum Capital Group are reportedly preparing a joint bid for $22 billion of Russian oil giant Lukoil‘s international assets. If completed, the deal would see Chevron and Quantum split a portfolio of assets spanning oil and gas production, refining operations, and more than 2,000 fuel stations across Europe, Asia, and the Middle East.

• Mobileye Global Inc. (NASDAQ:MBLY) agreed to acquire Mentee Robotics, an AI-first humanoid robotics company, for $900 million. The total consideration comprises approximately $612 million in cash and up to approximately 26.2 million Mobileye Class A shares, adjusted for any Mentee options that vest prior to closing. The transaction is expected to close this quarter.

• D-Wave Quantum Inc. (NYSE:QBTS) agreed to buy Quantum Circuits Inc. for $300 million in stock and $250 million in cash. The company said the deal combines two key quantum computing approaches under one company. D-Wave said the transaction strengthens its reach across the broader quantum market.

Off The Block

• Compass, Inc. (NYSE:COMP) stock rose on Friday after the company announced the completion of its $1.6 billion all-stock merger with Anywhere Real Estate Inc., a deal that creates a $10-billion real estate giant. This merger results in the creation of Compass International Holdings. It combines Compass’ technology-driven brokerage platform, marketing capabilities, and agent network with Anywhere’s globally recognized real estate brands and diversified businesses. These businesses span franchising, title, escrow, and relocation services.

• Nike (NYSE:NKE) sold NFT subsidiary RTFKT to an undisclosed buyer in the latest sign that non-fungible tokens, or NFTs, are a passing fad.

For the previous edition of Deal Dispatch, click here.

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