In an apparent move to go private, Trans World chairman and CEO Robert J. Higgins has proposed paying $5 each for the outstanding publicly-traded shares of the 950-unit, Albany, N.Y.-based chain.

The company's shares closed at $3.88 last night but have since traded up to $4.99 on news of the bid.

Higgins, the largest shareholder in the company who with related persons and entities, has an approximately 40% stake in the company.

The proposal was made to a special committee of the company's board of directors consisting of non-management board members. The special committee previously retained Goldman, Sachs & Co. as its financial adviser to explore strategic alternatives to enhance shareholder value, the company announcement says.

A company press release states that Higgins has contacted another shareholder, Bryant Riley, who a Wall Street sources says is the second largest shareholder, with a 10% stake, to see if he wants to participate.

One Wall Street analyst speculates the special committee likely explored selling the chain as one avenue to enhance shareholder value. As such, sources suggest that Higgins’ gambit might be arising from two different scenarios.

On the one hand, a Wall Street source suggests that the Higgins’ offer could be a ploy to put the company in play, i.e. hoping that it would attract potential suitors to make a bid to buy the company at a higher price than Higgins' offer.

But it also could achieve the objective in taking the chain private, which would be attractive to Higgins if he feels the market is not properly recognizing the chain's value. Or it could mean that in a market with declining CD sales, Trans World might be planning some aggressive and costly steps to improve performance that might cause consternation among shareholders, if the chain were still public.

If the company goes private, the question remains how Higgins would finance the deal. If Riley participates and the price remains at $5 a share, Higgins would need to raise $77.7 million, not including investment banking and legal fees. If Higgins has to go at it alone, he would need $93.2 million.

As of Aug. 3, Trans World had drawn down $67.8 million from the chain's $150 million line of credit. It's unclear how suppliers would react if Trans World had to more than double its debt load.