Carl Icahn, Dish Network Bid on Blockbuster
8:02 AM PDT 4/5/2011 by Georg Szalai
UPDATED: A financial group also remained in the auction in New York as it moved into the evening hours.
NEW YORK - The public portion of the auction of video rental firm Blockbuster dragged on into the evening hours on Tuesday with three remaining bidders - a group led by activist shareholder and billionaire Carl Icahn, Charlie Ergen's Dish Network and a group of financial firms that hold Blockbuster debt.
However, as of the early evening, lawyers and investment bankers representing Blockbuster and its creditors had ruled that a latest $308.1 million offer from the financial group was in the lead.
As the auction kicked off around 10:40 a.m. ET, a $284 million offer from satellite TV firm Dish had been deemed the lead bid.
The second-highest bid at $280.9 million came from Icahn's group, which also includes liquidators Great American Corp. and Tiger Capital in a sign that Icahn would look to close down at least some more Blockbuster stores as part of his strategy. Icahn himself showed up at the bankruptcy court building at around 1:30pm ET.
South Korean mobile phone operator SK Telecom was also admitted as a qualified bidder in the auction and pitched itself as the best option for studios looking to make back money owed to them. It was believed to be looking for mobile video content. Plus, there was a joint bid from liquidators Gordon Brothers and Hilco Merchant Resources, which offered to liquidate the firm's stores rather than continue to operate them, but that bid was eliminated early.
In the opening move of the auction, the Icahn group offered $291.4 million to take the lead in an early sign that he was a serious contender for an acquisition.
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