Blockbuster Inc. announced that the U.S. Bankruptcy Court for the Southern District of New York has authorized Blockbuster to conduct an auction process for the company.
For more information visit: www.blockbuster.com
Unedited press release follows:
Court Approves Bidding Procedures for Sale of Blockbuster
Major Parties Reach Agreement on Revised Stalking Horse Bid; Auction to be Conducted under Section 363
Blockbuster Continuing to Serve Customers in the Ordinary Course
DALLAS–Blockbuster Inc. (OTHER OTC: BLOKA, BLOKB), a leading global provider of rental and retail movie and game entertainment, announced that the U.S. Bankruptcy Court for the Southern District of New York has authorized Blockbuster to conduct an auction process for the Company. The auction process is designed to achieve the highest and best offer for the Company’s assets and would be conducted under the Court’s supervision and in accordance with Section 363 of the U.S. Bankruptcy Code. Blockbuster believes the auction process represents the best means of maximizing value for the Company’s stakeholders.
As previously announced, Blockbuster has entered into an asset purchase agreement with a “stalking horse” bidder, Cobalt Video Holdco, LLC, a limited liability company formed by funds managed by Monarch Alternative Capital LP, Owl Creek Asset Management LP, Stonehill Capital Management LLC and Värde Partners, Inc., each of which is a secured noteholder of the Company. The Cobalt agreement, which was modified to address certain objections that were raised prior to a court hearing on March 10, will serve as the “stalking horse” bid in the auction, which sets the floor or minimum acceptable bid. At the March 10 hearing, the court denied a motion seeking to immediately convert the Company’s Chapter 11 cases to liquidation cases under Chapter 7 of the Bankruptcy Code.
Blockbuster expects that its U.S. operations, including a majority of its stores, DVD vending kiosks, by-mail and digital businesses, will continue to serve customers in the ordinary course during the sale process. The Company’s international operations in Canada, Denmark, Italy, Mexico, and the United Kingdom are also expected to conduct business as usual during the sale process. Blockbuster franchise locations in both the U.S. and abroad are independently owned, operated and funded, and will also continue normal business operations.
Jim Keyes, Chairman and Chief Executive Officer, commented, “We are pleased that the court has authorized us to proceed with the auction process, which we believe represents the best opportunity to move the Company forward and maximize value for our stakeholders.”
Under the terms of the revised Asset Purchase Agreement (the “APA”), Cobalt has agreed to purchase substantially all of the assets of Blockbuster Inc. and its U.S. and international subsidiaries for $290 million, subject to adjustment. The modifications to the original APA were announced at the March 10 court hearing. The transaction is subject to the approval of the Bankruptcy Court and the satisfaction of customary closing conditions.
It is expected that the approved bidding procedures, which will be embodied in a court order, will require other interested parties to submit binding offers to acquire the Company within approximately 25 days. Such parties could include additional financial and/or strategic bidders. Assuming qualified bids are submitted, it is anticipated that an auction would be held early next month. A final sale approval hearing is anticipated to take place shortly after the auction with the closing anticipated to occur shortly thereafter.
The Company and its domestic subsidiaries filed voluntary Chapter 11 petitions on September 23, 2010. Additional information is available at www.Blockbuster.com/recapitalization or by telephone at 877-660-6684 or 732-645-4110. General information for Blockbuster customers is available at www.Blockbuster.com or by calling 1-866-692-2789.
About Blockbuster Inc.
Blockbuster Inc. is a leading global provider of rental and retail movie and game entertainment. The Company provides customers with convenient access to media entertainment anywhere, any way they want it – whether in-store, by-mail, through vending kiosks or digitally to their homes and mobile devices. With a highly recognized brand and a library of more than 125,000 movie and game titles, Blockbuster leverages its multichannel presence to serve nearly 47 million global customers annually. Information about the Company may be accessed worldwide at www.blockbuster.com.