Global Brands Group has agreed to buy out BCBG Max Azria Group for a cash consideration of US$23 million (about HK$179 million).

Completion of the transaction is conditional upon, among other things, US Bankruptcy Court approval of the reorganisation plan for the BCBG Group and other necessary regulatory approvals.

Just last week, industry insiders were speculating that Global Brands would be part of a consortium in a rescue bid for BCBG Brands as it faced a bankruptcy auction.

Global Brands has entered into an asset purchase agreement with BCBG, conditionally agreeing to acquire inventory, retail store leases and other assets and contract rights relating to the retail, wholesale and e-commerce business of BCBG Brands.

In connection, Global Brands will acquire intellectual property assets as part of a court-approved reorganisation plan for BCBG.

While the transaction is subject to reporting and announcement requirements, it is exempt from shareholder approval.

The consideration was determined as part of a reorganisation plan for the BCBG Group submitted to the US Bankruptcy Court for approval after arm’s length negotiations between the parties. Completion is expected on or before July 31.

For the year ended January 28, BCBG net sales were about $614.7 million compared with $670.8 million 12 months earlier. The losses before and after tax attributable to BCBG for the year, based on unaudited management accounts, were about $111.2 million and $112 million, respectively. A year earlier, the corresponding losses were about $5.3 million and $6.5 million.

There was a deficit of about $456.7 million in the value of net assets, based on unaudited management accounts.

Global Brands board says the acquisition represents a strategic opportunity to acquire high-quality assets at an attractive valuation.

BCBG, primarily engaged in the international retail of women’s ready-to-wear products and accessories, was founded in 1989.