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Wednesday, February 23, 2011

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."