Blockbuster assets are up for grabs in an auction and a judge is to decide Thursday who gets the company.
Toby Talbot / AP Enlarge
NEW YORK — Billionaire investor Carl Icahn, Dish Network Corp., and a pair of liquidation firms are among the bidders for video-rental chain Blockbuster Inc. in an auction Tuesday at U.S. Bankruptcy Court in New York.
Dish Network made a $307.1 million bid for Blockbuster’s movie rental business, bettering a $304.6 million bid from Mr. Icahn and a group of liquidators.
SK Telecom Co. won’t place another bid and believes its prior cash bid of $284.5 million is superior to other bids because it will take on more liabilities for movie studios and cover other costs. Other bidders include a joint bid by liquidation firms Gordon Brothers Group and Hilco Merchant Resources, and a group of debtholders led by Monarch Alternative Capital LP.
The bankruptcy auction will decide the fate of the Dallas movie-rental chain.
The successful buyer or buyers could continue to operate the chain in full or part or liquidate the company, pressing “stop” on the stores that brought movie night to millions of families.
When Blockbuster, based in Dallas, filed for bankruptcy protection, it was down to 3,000 stores, less than a third of the peak of 9,100 in 2004. There are about 2,400 currently open with plans to close about 700 more by mid-April.
Mr. Icahn was part of the group of debtholders that provided Blockbuster financing to operate while in bankruptcy in September. Everyone in that group except for Mr. Icahn, is part of the bidding group of debtholders led by Monarch, called Cobalt Video Holdco LLC.
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.
The auction is expected to be complete before a sale approval hearing scheduled for Thursday.