ROCHESTER, N.Y. (Aug. 14, 2006) — Monro Muffler Brake Inc. has decided not to exercise its option to buy the remaining 87 percent of Strauss Discount Auto, but Monro is looking at buying “selected assets” of the firm through the bankruptcy process.
Monro said the “continued deterioration in Strauss' financial condition and operating performance” make the original option agreement no longer a good deal. Monro had bought a 13-percent stake in Strauss in November 2005 with an option on the remaining 87 percent.
Strauss recently filed Chapter 11 bankruptcy.
“We concluded that the terms of our initial agreement no longer presented a viable basis for exercising the option in light of Strauss' financial condition and operating performance,” said Robert Gross, president and CEO of Monro. “While we made every attempt to renegotiate the terms of the option agreement at a price that we believe reflected Strauss' recent performance, we were unable to reach an agreement. That said, we believe that Monro and its shareholders will be best served by exploring the purchase of selected Strauss assets through the bankruptcy process.”
Monro said it expects to be paid in full on its $5 million secured loan to Strauss.