Blockbuster was once the leader in the movie rentals business but with the fast growth of digital and mail order competitors, the business found itself filing for bankruptcy last September. In February Blockbuster had to put itself up for sale when reorganization failed.
Dish Network Corp won Blockbuster Inc in a bankruptcy auction for about $320 million, a move that could see the second-largest U.S. satellite TV provider tapping the movie rental chain's online content to strengthen its offerings.
Dish, led by satellite billionaire Charlie Ergen, trumped at least three other bidders, including activist investor Carl Icahn, for the one-time leader in video rentals. A $308.1 million bid from Cobalt Video, a group of hedge funds headed by Monarch Alternative Capital LP, was the highest bid before the auction was moved to an attorney's office not open to the press. Icahn had bid $310.6 million, but his bid included less money than Monarch's for notes rolled up into a bankruptcy loan and was thus considered a lower bid.
Dish might find Blockbuster's online content appealing as the company could use it as a base for an online product to deliver movies. Blockbuster will complement Dish’s existing video offerings while presenting cross-marketing and service extension opportunities.
The deal marks the second purchase of a bankrupt company by Dish. Last month, Dish got a nod from a bankruptcy court to buy hybrid satellite and land-based communications company DBSD North America for about $1.4 billion.
The Blockbuster deal is not yet finalized. The Federal Bankruptcy Court on Thursday is expected to approve the bid submitted by Dish Network Corp.
