Vicorp negotiating sale of substantially all assets with Fidelity National, Newport Global Advisors

By Caroline Salls

Pittsburgh, Dec. 11 - Vicorp Restaurants Inc. has received an offer for substantially all of its assets from Fidelity National Special Opportunities, Inc. and Newport Global Advisors that includes a $59 million cash component and issuance of warrants, according to a bid procedures motion filed Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

Fidelity National and Newport Global have agreed to form a new entity to serve as stalking horse bidder in connection with the proposed asset sale.

The warrants to be issued as part of the purchase price will represent 10% of the buyer's common stock at closing. In addition, Vicorp said the cash portion of the purchase price will include a $20 million equity contribution.

The company said its amended debtor-in-possession credit agreement requires it to sell substantially all of its assets by Jan. 31.

Vicorp said the final asset purchase agreement is still being negotiated, and it will file the details of the agreement by Dec. 17.

If the new entity is not the high bidder at auction, Vicorp will pay it a 3% break-up fee and reimburse up to $750,000 of its sale-related expenses.

Competing bids must be for at least $62.05 million, and all bids must include a $1 million deposit. Subsequent bids at auction must be for at least $500,000 more than the previous bid.

The bidding deadline is 10 a.m. ET on Jan. 9.

The auction will be held on Jan. 13.

Vicorp, a Denver-based restaurant operator, filed for bankruptcy on April 3, 2008. Its Chapter 11 case number is 08-10623.

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