GGP Ggp Inc. (delisted)

Landlords, liquidators and licensing firm Authentic Brands Group have teamed up in a joint bid to save some 229 Aé ropostale stores, putting an offer of $243.3 million on the table at a bankruptcy auction, according to people familiar with the matter.

Major Aé ropostale landlords Simon Property Group and General Growth Properties are part of the joint Aé ropostale venture with Authentic Brands, along with liquidators Gordon Brothers Retail Partners LLC, and Hilco Merchant Resources LLC, the people said.

An auction that was slated to begin Monday in New York was adjourned Tuesday to let the deal coalesce. If the joint-venture deal holds, it will be a stunning development for Aé ropostale, a company that late last week seemed doomed to liquidation, which would put more than 10,000 people out of work.

Last week, Judge Sean Lane in New York issued a ruling that allowed private-equity firm Sycamore Partners to bid at the auction by offering to cancel $150 million of loans it made to Aé ropostale. The decision gave Sycamore, which controls a key lender to Aé ropostale, the upper hand at the coming auction, because rivals would have to come up with cash.

That wasn't a likely prospect, according to Aé ropostale. During a bruising court fight with Sycamore, Aé ropostale warned that credit-bidding rights for Sycamore would set a high bar for rival bidders interested in keeping the company alive.

Sycamore said earlier this week it made an offer for Aé ropostale, but the private-equity firm has repeatedly said liquidation is likely the best offer for the teen retailer, which has been struggling to pay rent on hundreds of stores while competing with newer, more-nimble fashion sellers.

Sycamore declined to comment on the developments at the auction or to discuss whether its offer would preserve any of Aé ropostale's stores.

A second bidding group, made up of liquidator duo Tiger Capital Group LLC and Great American Group LLC, has also made an offer, and could come back Wednesday in an effort to beat the landlord joint venture.

Representatives for Hilco, Authentic Brands and the landlords couldn't immediately be reached to comment on the matter. Gordon Brothers declined to comment on the matter.

Teen retailer Aé ropostale filed for bankruptcy protection in early May and immediately began shuttering 150 of its 800 stores.

Write to Lillian Rizzo at Lillian.Rizzo@wsj.com and Peg Brickley at peg.brickley@wsj.com

(END) Dow Jones Newswires

August 30, 2016 17:55 ET (21:55 GMT)

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