Bankrupt video-rental chain Blockbuster Inc. on Monday said that it has agreed to sell itself for $290 million to its current debt holders in a “stalking horse bid.” The transaction would allow other suitors to make higher bids. The offer was made by a group of creditors, called Cobalt Video Holdco, including Stonehill Capital Management and Monarch Alternative Capital.
According to a court filing on Monday, the deal would allow the shareholders to liquidate the company under Chapter 7 of the U.S. bankruptcy code. The video-rental chain filed Chapter 11 reorganization last September in a bid to restructure its operations. Blockbuster has been under pressure from online video rental company Netflix Inc. and video vending machine company Redbox, which is owned by Coinstar. Blockbuster said that it is hoping to close a final sale by end of April.
