You can put this in the “Why?” file but it seems somebody at least wanted to buy the Blockbuster video rental chain even as that business is going in the toilet. That somebody is Dish Network who, pending approval at a hearing on Thursday, will acquire Blockbuster Inc. following an auction that took place this week.
Dish Network’s winning bid was approximately $320 Million but the acquisition is expected to end up costing more like $228 Million in cash, taking into account Blockbuster’s inventory, available cash and other adjustments. Blockbuster was put up for sale at auction on Monday following its recent bankruptcy filing, and several companies competed for control of Blockbuster’s business and assets.
Dish’s winning bid topped several other bidders including Cobalt Video, a group of hedge funds lead by Monarch Alternative Capital and billionaire investor Carl Icahn. Also, I considered bidding as well but then the feeling passed after I turned on Netflix, started streaming a movie and realized having a video store these days is a pretty dumb idea.
However, Dish Network doesn’t seem to agree. “Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for Dish Network,” said Dish Network’s EVP of sales, marketing and programing, Tom Cullen. Okay, if you say so.
Click through for the full press release from Dish Network. And no, it doesn’t really explain the ‘Why?” either. Really, I can’t remember the last time I went to a Blockbuster and rented a movie. Can you?
ENGLEWOOD, Colo., April 6, 2011 /PRNewswire/ — DISH Network Corporation (NASDAQ: DISH) announced that it was selected as the winning bidder in the bankruptcy court auction for substantially all of the assets of Blockbuster, Inc. DISH Network’s winning bid was valued at approximately $320 million. After certain adjustments are made at closing of the transaction, including adjustments for available cash and inventory, DISH Network expects to pay approximately $228 million in cash to acquire Blockbuster at the closing which is expected to occur in the second quarter of 2011.
“With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for DISH Network,” said Tom Cullen, executive vice president of Sales, Marketing and Programming for DISH Network. “While Blockbuster’s business faces significant challenges, we look forward to working with its employees to re-establish Blockbuster’s brand as a leader in video entertainment.”
Completion of the transaction is contingent upon satisfaction of certain conditions, including bankruptcy court approval.