Blockbuster Receives Bid From Debtholders

Posted on February 22, 2011 at 9:31am by

MarketWatch – Movie rental group Blockbuster Inc. said late Monday that a group of investors has offered to buy it out of bankruptcy. Blockbuster said a $290 million so-called ‘stalking-horse’ bid, in which a company proposes a starting bid as a basis for others, has been initiated by Cobalt Video Holdco LLC. The limited liability company is formed by funds managed by Monarch Alternative Capital LP, Owl Creek Asset Management LP, Stonehill Capital Management LLC and VC$rde Partners Inc.

Blockbuster said it has asked the U.S. Bankruptcy Court in the Southern District of New York to conduct an auction process for the group. Blockbuster said its U.S. and international operations, including a majority of its stores, will continue to operate as normal during the sale process.

“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,” said Jim Keyes, chairman and chief executive officer of Blockbuster.

The bidding process, if approved by the courts, would require other companies to send binding offers within 30 days.