Blockbuster Inc., the bankrupt movie rental chain, agreed to sell itself to a group of debtholders for $290 million in a stalking horse bid that is subject to higher and better offers. Photographer: Jin Lee/Bloomberg
Blockbuster Inc., the bankrupt movie rental chain, agreed to sell itself to a group of debtholders for $290 million in a stalking horse bid that is subject to higher and better offers.
The company entered into an asset purchase agreement with Cobalt Video Holdco LLC, formed by secured noteholders Monarch Alternative Capital LP, Owl Creek Asset Management LP, Stonehill Capital Management LLC and Varde Partners Inc. The deal needs approval from bankruptcy court.
Blockbuster is also seeking authorization from the court to start an auction for the company. The move will help accelerate bankruptcy proceedings, Chairman and Chief Executive Officer Jim Keyes said in a statement.
Interested parties would need to bid within 30 days if Blockbuster’s request for an auction is granted. The final sale approval hearing will probably be held before April 20, Dallas- based Blockbuster said.
The company was founded in 1985 and grew to serve almost 47 million customers daily in the U.S. and 16 other countries. Viacom Inc., which owns the Paramount film studio, bought Blockbuster from Wayne Huizenga for $8.4 billion in 1994, then spun it off to shareholders in 2004.
Blockbuster filed for bankruptcy protection on Sept. 23.