Blockbuster up for sale, beginning bid $290 million in place

News broke today that Blockbuster Inc. is for sale! Since going bankrupt, the chains creditors have not come to an agreeement on how to reorganize the company’s assets, the chain is up for auction. Cobalt Video Holdco, LLC was created by  Monarch Alternative Capital, Owl Creek Asset Management, Stonehill Capital Management and Varde Partners to kick-off the sale with a ‘stalking horse’ bid of $290m offer. The bid is intended to establish a lower threshold for future bids. If no one else bids, the group of creditors could end up owning Blockbuster.

Blockbuster plans to operate as normal during the sale. Jim Keyes, Chairman and Chief Executive Officer, issued the following statement:

By initiating a sale process at this time, we intend to accelerate our Chapter 11 proceedings and move the Company forward. An auction will allow the Company to invite competing bids from both strategic and financial investors. This will also allow for the consolidation of ownership of the Company to those with a clear and focused vision for Blockbuster’s future. The purchaser will be able to take full advantage of Blockbuster’s many strengths, which include an internationally recognized brand name, an exceptional library of more than 125,000 titles, millions of loyal customers, and a multi-channel content distribution platform. Because of its ability to deliver physical content (through DVDs) and digital content (through streaming), Blockbuster can offer customers the unique ability to access any movie, any time.

I think they should expand their Blockbuster Kiosk operation and close all rental locations and just operate their disc delivery service. It would be awesome if they also had a streaming option. I know they are late to the game, but that would be a smart way for them to redefine the way they do business.

What are your thoughts of this news?