VOL. 126 | NO. 65 | Monday, April 4, 2011
Report: Dish, Icahn Join Bidding for Blockbuster
MAE ANDERSON | AP Retail Writer
NEW YORK (AP) – Several bidders are set to duke it out for Blockbuster Inc. at a bankruptcy auction in New York on Monday. They reportedly include Dish Network Corp. and billionaire investor Carl Icahn.
The movie-rental chain has received several bids other than the opening bid of $290 million from a group of debtholders made in February. Blockbuster filed for Chapter 11 bankruptcy protection in September.
Dish and Icahn have each submitted a bid, The Wall Street Journal reported Friday, citing anonymous sources familiar with the matter.
Dish Network declined to comment. Icahn could not immediately be reached for comment.
Jay Indyke, attorney for the committee of unsecured creditors, says several bids had come in but did not specify who they are from.
Icahn has been expected to make a bid. He was part of the group of debtholders that provided Blockbuster financing to operate while in bankruptcy in September. Everyone in that group, except for Icahn, made an opening bid in February, known as a "stalking horse" bid, to buy Blockbuster for $290 million.
Blockbuster used to dominate the U.S. movie rental business. But it lost money for years as that business declined because customers shifted to Netflix Inc., video on demand and DVD rental kiosks.
Prospective bidders are either after Blockbuster's assets, such as its name, kiosks and movie-download service, or the money they can make from liquidating the brand, analysts said.
"The prospective bidders would have to believe that they can generate sufficient cash to provide payback plus a return on their investment," said Wedbush analyst Michael Pachter. "I am skeptical that a sale will occur at a price higher than was offered a few weeks ago."
When it filed for bankruptcy protection in September it was down to 3,000 stores, less than a third of the peak of 9,100 in 2004. In December, the chain said it planned to close 182 more in the next few months.
Following the auction, a sale approval hearing is scheduled for Thursday.
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