Downtown-Based Blockbuster to Go on Auction Block. The Opening Bid? A Whole $290 Million.

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Blockbuster, which went into voluntary Chapter 11 in September, said in a statement released moments ago that it has agreed to sell to a group of noteholders -- one of whom happened to be named Monarch Alternative Capital, the very same creditors to whom Tom Hicks owed all those hundreds of millions back when he owned the Texas Rangers. The group, called Cobalt Video Holdco, LLC, has agreed to buy the Renaissance Tower-based company for the low, low, low price of $290 million -- which, per Blockbuster, is the opening "stalking horse" bid should others interested in buying the company step forward offering more.

Nothing's certain, at least not till the bankruptcy court in New York signs off on the offer and spells out the bidding procedures. But, insists CEO-for-now Jim Keyes in the company's official statement, this is the best deal on the table:
"By initiating a sale process at this time, we intend to accelerate our Chapter 11 proceedings and move the Company forward. 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.

"The purchaser will be able to take full advantage of Blockbuster's many strengths, which include an internationally recognized brand name, an exceptional library of more than 125,000 titles, millions of loyal customers, and a multi-channel content distribution platform. Because of its ability to deliver physical content (through DVDs) and digital content (through streaming), Blockbuster can offer customers the unique ability to access any movie, any time."
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13 comments
Joshua
Joshua

I am amazed that Obama and Tim Geithner have not submitted a US Government Bail out bid for 3 Billion dollars to save the jobs.

Fakit
Fakit

I think the property would be worth an easy $290 Mill. How many stores? Mostly good locations.

ModernDrift
ModernDrift

What are the effects this has on the headquarters staying in Dallas? I would imagine in the short term it would have no impact, and it if is bought by an out of town private equity firm, no long term impact as there would be no reason to move the business as they slice and dice it for spare parts.

The only way I see Dallas losing the headquarters is in the unlikely scenario a competitor such as Redbox, Netflix, Amazon, et al. buys them. Of course this assumes there will still be an entity that remotely resembles the Blockbuster we know today in 24 months time.

LaceyB
LaceyB

Not so bad. If you sold every one of those crappy videos for $20 ea., it would almost add up to $290 mil.

Steve
Steve

Yeah, but the late fees really add up.

cynical old bastard
cynical old bastard

If it weren't for all the people that may lose their jobs this would almost be funny. And Keyes will walk away with how much?

Rooster
Rooster

Wow. Someone's about to get screwed out of $290 million....

Rooster
Rooster

Surely you're not that naive?...

Yakuza_Fighter
Yakuza_Fighter

Why would anyone buy them when you can watch them bleed to death and then pick up any pieces you might want? Who wants to own a brick and mortar video store?

On the other hand, if scumbag Cable/Phone companies start blocking video streaming traffic, then brick and mortar stores might have some value.

If anyone buys them, it will just be for the name - for a couple of million.

Anonymous
Anonymous

It's not like they paid $290 million out of pocket. They probably paid a small fraction of that.

Rooster
Rooster

If they paid $50 out of pocket, they're about to get screwed out of $50.

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