Houston-based Handy Hardware Wholesale has received acquisition overtures, according to a memo to dealers from the co-op’s board of directors.
No formal offers have been made, and none was solicited, the board said in the March 28 letter obtained by HCN. Handy did not immediately respond to an HCN request to reveal the identity of the two companies that made overtures.
Handy filed for bankruptcy protection in January and submitted a plan for reorganization in March.
While the board says it is focused on the goal of emerging from bankruptcy as a member-owned hardware co-op, the board has a legal and fiduciary responsibility to share information regarding a possible purchase, the letter explained.
“The BOD is required by the bankruptcy process to seriously evaluate and consider any options presented,” the letter states. “However, the BOD remains committed to the preservation of our cooperative in order to ensure the long-term benefits that we have all come to depend upon from Handy.”
Under the informal proposals in question, Handy would operate as a subsidiary of or be consolidated into another distributor, the letter explained. “Handy’s current members would be encouraged to remain on as customers, but it would mean that our members likely would have no ownership or control over the business,” the letter states.
The March 28 further encouraged Handy members to support the co-op by buying more from Handy.
Handy’s board of directors includes Virgil Cox, Ike Epstein, Suzanne Elliott, Chris Court, Bob Wyrick, Ken Blackmon and Tommy Chauvin.