Blockbuster Public Auction Set to Start Tuesday
UPDATED: The non-public part of the process began in bankruptcy court in New York on Monday.
NEW YORK -- An auction process for video rental firm Blockbuster kicked off in bankruptcy court here Monday with a range of meetings - behind closed doors and in hallways - between lawyers and investment bankers representing the company, debtors and qualified bidders.
A spokesman for Blockbuster had said early Monday that the sales process may be a two-day affair.
Late in the day, he said that the parties would wrap up by 6pm ET and that the process would resume on early Tuesday morning. It is expected to go into its formal public auction phase, in which bidders will get a chance to face off in a public process, "sometime Tuesday morning," he added. Unlike Monday's meetings, which were designed to help the company gauge which bids may yield the most money for Blockbuster creditors, the public portion will feature a video and audio feed for journalists in a separate room.
The Blockbuster spokesman didn't provide any information on the number or identity of bidders, but typically this type of auction sees suitors looking for possible alliances and deciding how long to stay in the bidding process.
It emerged last week that activist investor Carl Icahn and Charlie Ergen's Dish Network are among the qualified bidders. South Korean mobile phone firm SK Telecom has also been weighing a bid for Blockbuster.
The video rental company, which has suffered from the growth of Netflix and other competitors, is looking to wrap up a sales agreement before a Thursday court hearing in front of Judge Burton Lifland to approve a sale.
Lifland, who is overseeing the bankruptcy case, made available rooms at the bankruptcy court for the auction process early this week.
Icahn's team had its own room in the court building on Monday. Among other people spotted in the hallways of the bankruptcy court building was Blockbuster CEO Jim Keyes.
Blockbuster filed for Chapter 11 bankruptcy protection in the fall and then decided to put itself up for sale with a $290 million minimum bid set by a group of financial firms.
Michael Williams, dean of Touro College’s Graduate School of Business, on Monday suggested it was "improbable" that bids would go very high in the auction.
Blockbuster "is not competitive in the current retail movie-view environment," he argued. "In addition, it does not appear to have sufficient capital to morph into a competing format that would enable it to achieve a competitive advantage in the environment."