Investor expected to bid for vid chain's assets
It looks like Carl Icahn’s long saga with Blockbuster will continue, as the billionaire investor is all but certain to bid for the beleaguered video chain, which is likely to be put up for sale in an auction.
Creditors were unable to agree on a reorg plan for Blockbuster to emerge from bankruptcy so a sale appears imminent. The chain went into Chapter 11 in September.
Icahn, who gobbled up about a third of the debt in Blockbuster last year after unloading his 17% equity stake, would likely partner with fellow creditor Monarch Alternative Capital, an investment firm focused on bankrupt properties. According to one source, Blockbuster could fetch as much as $300 million.
Icahn did not return calls seeking comment.
The retail chain, which has 3,000 stores, has faced fierce competition in recent years from the likes of Netflix, Amazon and kiosk retailer Redbox.
Icahn waged a proxy fight at Blockbuster in 2005 that gave him a board seat, which he relinquished in January 2010, a move that led some to believe he was done with it.
In the third quarter of last year Blockbuster reported a loss of $53 million and revenues of $737 million. It is carrying about $1 billion in debt.
Icahn still holds a 33% equity position in Lionsgate and has more than a 15% stake in MGM.