The investors, Monarch Alternative Capital, Owl Creek Asset Management, Stonehill Capital Management and Värde Partners, have formed Cobalt Video Holdco, LLC, with no real intention of acquiring Blockbuster. The purpose of the bid, reported at $290 million for the chain's assets, is to set a minimum acceptable bid for another buyer to acquire Blockbuster.
As it did when it announced it was seeking Chapter 11 protection last year, Blockbuster said it expected to continue operating as usual while the sale process goes on.
"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," said Jim Keyes, chairman and chief executive officer of Blockbuster, in a statement.
"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," Mr. Keyes said. "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."
Companies interested in getting in on the Blockbuster bidding will have roughly 30 days following court approval to submit bids for the company. An auction will be held approximately one week later with the closing expected to take place by April 20 at the outside.