Talbots completes step in reorganization

Hingham, Mass. The Talbots completed a crucial part of its reorganization plan -- aimed at buying out its largest shareholder -- by completing a warrants exchange.

Talbots struck a deal to acquire BPW Acquisition Corp., a blank-check company with $350 million in cash it raised from an IPO in February 2006, so it could use the cash to buy itself out from Japanese retail company Aeon (U.S.A.), which holds a 54% stake in the company.

Talbots offered to acquire BPW by an exchange of BPW's stock and warrants with Talbots stock and warrants. In February, 91% of BPW shareholders approved the deal.

Talbots extended the offer deadline each business day until Wednesday, when it had the required amount of stock and warrants tendered to go through with the deal.

The deal should close by the end of the week, the report said, and Talbots can buy back its stake from Aeon. It is also getting a new credit facility as part of the deal.

It will end up with about $160 million in debt when it had $491 million before the deal.