Bankers Trust Co. is negotiating to provide roughly $100 million in bank loans to help finance Leonard Green & Partners' planned purchase of Pacific Enterprises' Big 5 sporting-goods chain.

The Los Angeles-based buyout firm would use a portion of the bank financing for working capital.

A separate investor group led by Leonard Green is buying Pacific Enterprises' Thrifty Drug Stores operation, along with several of the company's smaller retailing chains.

It wasn't immediately clear how the Thrifty deal would be financed.

In a statement last Friday, Pacific Enterprises also said it agreed to sell its Pay 'n Save retail chain to a subsidiary of Kmart Corp.

$275 Million in Proceeds

Pacific Enterprises didn't disclose the terms of the various transactions but said total net proceeds, together with related tax benefits, would amount to about $275 million.

In bidding for the Big 5 chain, Leonard Green obtained a letter from Bankers Trust stating the bank's confidence that it could raise bank financing under certain circumstances.

Though the letter does not represent a formal commitment, it apparently provided necessary evidence of Green's ability to finance the purchase.

It's not clear whether the buyout firm obtained similar letters from other banks or whether Bankers Trust now has a lock on the deal.

Any formal bank financing commitment hinges on agreement on the exact capital structure of the underlying transaction, as well as on the terms of the financing.

While Leonard Green does not have an exclusive relationship with any one lead bank, its last sizable bank financing was underwritten by Bankers Trust.

In late 1990, the bank led a $133 million credit to help finance Leonard Green's $300 million purchase of Carr-Gottstein Inc., Alaska's largest food and drugstore chain.

Retail Holdings

The buyout firm's other retailing investments include Almac's Supermarkets in New England and the Kash 'n Karry foodstore chain in Florida.

Throughout the recession and subsequent anemic recovery, banks have been wary of financing retail deals, though exceptions have been made for foodstore buyouts. It remains to be seen whether the same will hold true for a sporting-goods chain like Big 5.

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