NEW YORK – South Korean mobile phone company SK Telecom is considering a bid for video rental chain Blockbuster, an SK official told the Wall Street Journal.
The paper said the official declined to say why South Korea’s largest mobile carrier by revenue is mulling a play for Blockbuster, which filed for Chapter 11 bankruptcy protection in the fall and is looking to finish an auction in the coming weeks.
However, the Journal said that SK has been looking for ways to broaden its business and growing overseas amid limited opportunities in its saturated home market. And buying Blockbuster could give the company access to video content for its mobile service business.
“It is now seeking new growth drivers, such as the broadcasting service business, in which content is the key factor for success,” Byun Sung-jae, an analyst at Daewoo Securities, told the Journal about SK. “Blockbuster is an offline DVD content rental company, but it also purchases massive content from some major Hollywood studios annually and has the biggest content distribution channel in the U.S.”
Blockbuster recently started an auction process by agreeing to sell itself to a group of bidders, made up of financial firms, for $290 million, which will serve as the minimum acceptable price tag. The company hopes the process will lead to a deal by April 20.
