Einstein/Noah has 460 stores across the nation, with 20 in the Kansas City area. The company was formed through the merger of several bagel companies, including Bagel & Bagel stores that were started in the Brookside neighborhood in 1988.
Three Cities Funds III, which is controlled by Three Cities Research, offered $145 million in cash and the assumption of $22.7 million in debt. Three Cities has already acquired $46 million of Einstein/Noah's $125 million in convertible bonds, according to the Securities and Exchange Commission.
Involved in the bankruptcy is Einstein/Noah Bagel Corp. and Einstein/Noah Bagel Partners, a subsidiary. The companies filed for bankruptcy after being unable to pay interest on the $125 in convertible bonds.
A hearing is scheduled for Feb. 26 to discuss others interested in buying the company. The sale has to be approved by the court. Another company, New World Coffee-Manhattan Bagel Inc. has expressed an interest. Company officials have said that a purchase of $36 million of the $125 in convertible bonds has already taken place.
Three Cities Research is a private equity fund formed in 1976. The fund invests in medium-sized businesses that are already operating in established markets. The company has other retail operations, but does not currently own any food retailers. Three Cities Research is in the process of investing more than $450 million into Three Cities Funds III, a company that was reorganized two years ago.
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