Brookstone Company, Inc. announced that it has signed a Letter of Intent with Bluestar Alliance, LLC to acquire the brand assets of the company and to serve as a stalking horse bidder in Brookstone's Chapter 11 restructuring. In addition, the Bankruptcy Court for the District of Delaware approved Bluestar as the "Stalking Horse" bidder for the Company's auction scheduled for the end of the month. Importantly, Bluestar's improved offer includes an option for Bluestar to select a transaction that would keep up to 50 existing Brookstone stores open, with a penalty of $400,000 payable if Bluestar either does not select this option or selects it and fails to keep at least 30 stores open.

"This agreement with Bluestar is an indication of the value of Brookstone's cherished brand, and we are particularly encouraged by Bluestar's enthusiasm to seriously consider a bid that includes operating Brookstone retail outlets," said CEO Piau Phang Foo. "We continue to see interest in our company from multiple potential buyers. During this time, we remain focused on serving our loyal customers, and we are grateful for the support of our dedicated employees."

The new offer, worth approximately $56.35 million comprising $50.45 million in cash and at least $5.9 million of value in the form of readily salable inventory, substantially improves upon Bluestar's earlier offer of $43 million. The signed Letter of Intent with Bluestar supersedes the previously-announced, $35 million proposal made by Authentic Brands Group, and is subject to negotiation of an Asset Purchase Agreement.

Bluestar's approved stalking horse bid is subject to higher and better offers in the auction to take place on September 26, 2018. The deadline to submit competing bids is September 20, 2018.