Troubled game and movie rental chain Blockbuster has been the subject of a $290 million buy-out bid, and hopes for larger offers yet.
The firm, which declared bankruptcy last year, last night announced that a stalking-horse bid had commenced - essentially an auction between potential investors.
Cobalt Video Holdco LLC, a collective of smaller investors, commenced bidding at $290 million, pending an agreement to manage the auction by a New York bankruptcy court.
"An auction will allow the company to invite competing bids from both strategic and financial investors," said Jim Keyes, chairman and chief executive officer of Blockbuster. "This will also allow for the consolidation of ownership of the Company to those with a clear and focused vision for Blockbuster's future."
Final offers from investors are expected within 30 days, and Blockbuster claims the majority of its business (both in the US and abroad) will operate as normal during that time.
Cobalt's bid would encompass the acquisition of all Blockbuster assets, including stores in the US, UK, Canada, Denmark, Mexico and Italy, but offers no binding agreement on continuing the chain as-is.
Keyes is keen to state the firm's existing merits, however. "The purchaser will be able to take full advantage of Blockbuster's many strengths, which include an internationally recognised brand name, an exceptional library of more than 125,000 titles, millions of loyal customers, and a multi-channel content distribution platform."
If the auction is first approved and then successful, any sale would be finalised by April 2011.