Blockbuster set for 'stalking horse' bid sale at $290 million

Blockbuster set for 'stalking horse' bid sale at $290 million

2011-02-22 06:48:18 GMT+7 (ICT)

DALLAS, TEXAS (BNO NEWS) -- Blockbuster Inc. on Monday announced that it has initiated a process to sell the company for $290 million in a 'stalking horse' bid.

Blockbuster - a movie and game entertainment rental and retail provider that once boasted almost 47 million clients on a daily basis - entered into an asset purchase agreement with a 'stalking horse' bidder, Cobalt Video Holdco, LLC, a limited liability company formed by funds managed by Monarch Alternative Capital LP, Owl Creek Asset Management LP, Stonehill Capital Management LLC and Värde Partners, Inc.

The Cobalt agreement serves as the 'stalking horse' bid in the auction, which sets the floor or minimum acceptable bid.

The purchase agreement is still pending authorization from the U.S. Bankruptcy Court for the Southern District of New York to conduct an auction process for the company.

The bidding procedures, if approved by the Court, would require other interested parties to submit binding offers to acquire Blockbuster within approximately 30 days following such approval. A final sale approval hearing is anticipated to take place shortly after the auction with the closing anticipated to occur no later than April 20, 2011.

"By initiating a sale process at this time, we intend to accelerate our Chapter 11 proceedings and move the company forward," Jim Keyes, Chairman and Chief Executive Officer, stated.

"An auction will allow the company to invite competing bids from both strategic and financial investors. This will also allow for the consolidation of ownership of the Company to those with a clear and focused vision for Blockbuster’s future," Keyes added.

On September 23, 2010, Blockbuster filed for bankruptcy.

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