The movie rental chain
The offer from Cobalt Video Holdco LLC is a so-called stalking horse bid, which Blockbuster hopes will attract other bidders who will offer more.
The Cobalt group includes funds managed by Monarch Alternative Capital LP, Owl Creek Asset Management LP, Stonehill Capital Management LLC, and Värde Partners Inc. They all hold secured Blockbuster debt, so they stand to benefit if someone else buys the company for more than the amount they paid for their Blockbuster debt.
The deal needs approval from the bankruptcy judge overseeing Blockbuster’s reorganization.
The company said other bidders would have 30 days after the process is approved by the judge to submit their own bids. That would prompt an auction. Blockbuster said it aims to close a final sale by April 20.
Earlier this month, The Wall Street Journal reported that Blockbuster planned to put itself up for sale after a disagreement with its creditors.
Blockbuster did not address that yesterday. But chief executive Jim Keyes said an auction “will allow for the consolidation of ownership of the company to those with a clear and focused vision for Blockbuster’s future.’’
Blockbuster used to be the dominant US movie rental chain. But it lost money for years as customers shifted to