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Blockbuster reaches deal with investors for $290 million buyout

Blockbuster has said this week that they have signed a $290 million deal that will sell the chain to a group of investors which will take it out of Chapter 11 bankruptcy.

The offer comes from Cobalt Video Holdco LLC, which consists of funds Monarch Alternative Capital LP, Owl Creek Asset Management LP, Stonehill Capital Management LLC and Varde Partners Inc.



Each of the funds hold secured Blockbuster debt.

While the deal needs approval from the federal judge overseeing the bankruptcy it is expected to receive the necessary approval soon. From there, other bidders have 30 days to place bids. If any other group does, the company would go up for auction.

CEO Jim Keyes added (via Y!):

An auction will allow for the consolidation of ownership of the company to those with a clear and focused vision for Blockbuster's future.

Blockbuster's stock fell to $0.14 at the close today.

Written by: Andre Yoskowitz @ 24 Feb 2011 1:51

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• 19 comments

• KillerBug

  "An auction will allow for the consolidation of ownership of the company to those with a clear and focused vision for Blockbuster's future."
  
  LoL...anyone who knows the future of BlockBuster wouldn't be dumb enough to buy stock...if the first order of business is to completely shut down operations, change the name, and start over from scratch, then this might work...but if they were going to do that, they wouldn't have started with BB.
  
  I am amazed they got as much as they did; the debt load they are accepting is much, much more than the purchase price. Last I heard, their debts are over 1 billion...and that was a while ago. Do the math...
  
  About 4500 stores all together. About 20% of those are privately owned...so that means they bought 3600 stores for about 1,290,000,000...or roughly $350,000 per store, for small local video shops that are in the red. Sure, they have the boxes (can't compete with redbox), and they have the disk/streaming service (can't compete with netflix)...but overall, all they got were some old buildings, a flawed corporate plan, and a name that is associated with poor service, bad selection, and insane prices by the vast majority of the people within driving distance of a store or kiosk.
  
  Some stocks to avoid:
  Monarch Alternative Capital LP
  Enron
  Owl Creek Asset Management LP
  Stonehill Capital Management LLC
  Confederated Slave Holdings
  Varde Partners Inc
  

  24.2.2011 06:03 #1

• ZippyDSM

  Originally posted by KillerBug: "An auction will allow for the consolidation of ownership of the company to those with a clear and focused vision for Blockbuster's future."
  
  LoL...anyone who knows the future of BlockBuster wouldn't be dumb enough to buy stock...if the first order of business is to completely shut down operations, change the name, and start over from scratch, then this might work...but if they were going to do that, they wouldn't have started with BB.
  
  I am amazed they got as much as they did; the debt load they are accepting is much, much more than the purchase price. Last I heard, their debts are over 1 billion...and that was a while ago. Do the math...
  
  About 4500 stores all together. About 20% of those are privately owned...so that means they bought 3600 stores for about 1,290,000,000...or roughly $350,000 per store, for small local video shops that are in the red. Sure, they have the boxes (can't compete with redbox), and they have the disk/streaming service (can't compete with netflix)...but overall, all they got were some old buildings, a flawed corporate plan, and a name that is associated with poor service, bad selection, and insane prices by the vast majority of the people within driving distance of a store or kiosk.
  
  Some stocks to avoid:
  Monarch Alternative Capital LP
  Enron
  Owl Creek Asset Management LP
  Stonehill Capital Management LLC
  Confederated Slave Holdings
  Varde Partners Inc
  Don't forget other defunct business Home State Savings Bank of Cincinnati, Midwest Federal Savings & Loan of Minneapolis Minnesota ,The Lincoln Savings and Loan, Silverado Savings and Loan.

  24.2.2011 11:15 #2

• jookycola

  Confederated Slave Holdings
  LMAO!
  
  It cost more to rent 3 movies from a Blockbuster store than it does to get a Netflix account that lets me take out 3 at a time and not accrue ANY late fees. And if i watch and return the Netflix DVD's in 4 or 5 days i get 3 new movies free, and a week later 3 more again....FREE, and again. And in between waiting for the movies i can stream movies and/or TV shows on almost anything with a screen. All for the same cost as renting 3 DVD's from an actual BB Store
  
  Where as if you rent the 3 DVD's from Blockbuster you pay $20+ bucks and return them to rent 3 more for another $20+ bucks, and so-on and so-on. Anyone that would rather piss away money, risk unreal late fees, and be treated like a piece of crap rather than do Netflix is crazy.
  

  
  

  24.2.2011 11:18 #3

• ZippyDSM

  BB needs to buy a small store spot,maybe 1 every other 80 miles, have a solid online system that can be used by the store that any movie can be returned to the store for free or to the online system for a small fee.
  
  Plans revolve around subscriptions, 5$ for 1 out at a time, 10 for 2, 15 for 3 and 25 for 5. You can purchase a premium subscription for 10$ more and all fees are waved, as well as you being at the top of all throttling.
  
  5$ more and you can take games out as well on any plan at 50% of the max out at a time.
  
  This works in 29 day cycles if you have anything over from the last period it counts in the new one.
  
  You can also pay 5$ a month for full coverage of accidental damage, lost discs may be replaced by the consumer or you pay the going rate for a rental disc which is 15% for a film or 40$ for a game.
  
  The stores themselves stock current and older hits that are watched the most, if a store dose not have it they can order it in for you for a 3$ fee and mail it to you for 2$ and there is a LCD board/tv that lists local(to the store) spacial ordered games and discs, if soemone requests an item someone else has it out the person that has that item is called and asked to bring it in for a 2$ credit.
  
  
  
  
  

  Until lobbying is a hanging offense I choose anarchy!
  Ah modern gaming its like modern film only the watering down of fiction and characters is replaced with shallow and watered down mechanics, gimmicks and shiny-er "people".
  http://zippydsmlee.wordpress.com/

  24.2.2011 11:48 #4

• lissenup2

  Originally posted by KillerBug: "An auction will allow for the consolidation of ownership of the company to those with a clear and focused vision for Blockbuster's future."
  
  LoL...anyone who knows the future of BlockBuster wouldn't be dumb enough to buy stock...if the first order of business is to completely shut down operations, change the name, and start over from scratch, then this might work...but if they were going to do that, they wouldn't have started with BB.
  
  I am amazed they got as much as they did; the debt load they are accepting is much, much more than the purchase price. Last I heard, their debts are over 1 billion...and that was a while ago. Do the math...
  
  About 4500 stores all together. About 20% of those are privately owned...so that means they bought 3600 stores for about 1,290,000,000...or roughly $350,000 per store, for small local video shops that are in the red. Sure, they have the boxes (can't compete with redbox), and they have the disk/streaming service (can't compete with netflix)...but overall, all they got were some old buildings, a flawed corporate plan, and a name that is associated with poor service, bad selection, and insane prices by the vast majority of the people within driving distance of a store or kiosk.
  
  Some stocks to avoid:
  Monarch Alternative Capital LP
  Enron
  Owl Creek Asset Management LP
  Stonehill Capital Management LLC
  Confederated Slave Holdings
  Varde Partners Inc Actually, I was thinking that a good risk might be to buy up a bunch of shares @ .14/share now and hopefully the investors will revamp the whole business model to be competitive with Netflix, Family video and Redbox. NEVER EVER cast a dying business as being down and out completely, especially when it's being bought. I know if I bought BB, I'd have that up and running with the best of the others turning a major profit, but that's just me.

  24.2.2011 13:28 #5

• biglo30

  They should have shut down operations a long time ago.

  24.2.2011 19:50 #6

• DVDBack23

  Originally posted by lissenup2: NEVER EVER cast a dying business as being down and out completely, especially when it's being bought. I know if I bought BB, I'd have that up and running with the best of the others turning a major profit, but that's just me. Tell that to MySpace and its $600 million buyout from Rupert Murdoch...lol
  
  
  

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  24.2.2011 21:23 #7

• KillerBug

  I almost bought bb stock when it hit 0.40, but then I looked at the debts, the low income, and the bad name, and realized that the stock wasn't worth as much as toilet paper.

  24.2.2011 21:47 #8

• duke8888

  Originally posted by KillerBug: "An auction will allow for the consolidation of ownership of the company to those with a clear and focused vision for Blockbuster's future."
  
  LoL...anyone who knows the future of BlockBuster wouldn't be dumb enough to buy stock...if the first order of business is to completely shut down operations, change the name, and start over from scratch, then this might work...but if they were going to do that, they wouldn't have started with BB.
  
  I am amazed they got as much as they did; the debt load they are accepting is much, much more than the purchase price. Last I heard, their debts are over 1 billion...and that was a while ago. Do the math...
  
  About 4500 stores all together. About 20% of those are privately owned...so that means they bought 3600 stores for about 1,290,000,000...or roughly $350,000 per store, for small local video shops that are in the red. Sure, they have the boxes (can't compete with redbox), and they have the disk/streaming service (can't compete with netflix)...but overall, all they got were some old buildings, a flawed corporate plan, and a name that is associated with poor service, bad selection, and insane prices by the vast majority of the people within driving distance of a store or kiosk.
  
  Some stocks to avoid:
  Monarch Alternative Capital LP
  Enron
  Owl Creek Asset Management LP
  Stonehill Capital Management LLC
  Confederated Slave Holdings
  Varde Partners Inc You are so right about the BB deal they are a big bust and yes they are so poor in handling mail order dvd service. They pulled every store out of Western Pa and to tell you the truth I really hate them with a passion. Great comments

  25.2.2011 09:06 #9

• dave817

  I've had Blockbusters 3x by mail with in-store exchange, unlimited per month, keep as long as I want. When I return a store DVD, I get one in the mail within 2 business days. I have trouble watching 6 DVDs a week that I can get for the $20/month. I get 3 new releases every Tuesday from my local store, 1 mile away. That's sure better than getting old DVDs from redbox for one night or netflix slow mail delivery. My DSL isn't fast enough to download movies.

  25.2.2011 10:52 #10

• jookycola

  Quote:dave817 Newbie
  
  I've had Blockbusters 3x by mail with in-store exchange, unlimited per month, keep as long as I want. When I return a store DVD, I get one in the mail within 2 business days. I have trouble watching 6 DVDs a week that I can get for the $20/month. I get 3 new releases every Tuesday from my local store, 1 mile away. That's sure better than getting old DVDs from redbox for one night or netflix slow mail delivery. My DSL isn't fast enough to download movies. I always wonder when i read something like this and then see that the poster is a newbie if it's a "ringer" from a company doing spin controll. Like maybe this guy is a store owner trying to hype it up. It's just so suspect when the company is universally hated and one brand new poster comes from out of nowhere to praise it.
  

  
  

  25.2.2011 13:03 #11

• wiseguy0

  You're probably right to be cynical, Jooky, but I have the mail service and love it too. More movies than I can watch, new releases faster, and now games at no extra charge! The on demand streaming sucks, but I only want to watch movies in their uncompressed dolby digital glory anyway.

  25.2.2011 14:09 #12

• KillerBug

  Originally posted by wiseguy0: You're probably right to be cynical, Jooky, but I have the mail service and love it too. More movies than I can watch, new releases faster, and now games at no extra charge! The on demand streaming sucks, but I only want to watch movies in their uncompressed dolby digital glory anyway. I use the streaming a whole lot more than the disks; I too get 6 disks a week; blockbuster may have the "edge" by allowing you to drive down to the store for returns...but that isn't much of an edge when the closest 6 stores are all now pawn shops. Anyway, netflix turnaround time is only 3 days, and the post office works 6 days a week...so I get the same service without needing to drive to the store for returns.
  
  ...I guess netflix is a bit slower on getting new movies...I really don't notice too much...there are not many new titles that I am just dieing to see ASAP and can't wait a month for.
  
  The games deal is nice...I don't know how well it is actually handled, but I figure it will either do well or force gamefly to adopt fair pricing. Either way, it is a good thing.
  
  

  
  

  26.2.2011 05:12 #13

• puterman

  Originally posted by jookycola: Quote:dave817 Newbie
  
  I've had Blockbusters 3x by mail with in-store exchange, unlimited per month, keep as long as I want. When I return a store DVD, I get one in the mail within 2 business days. I have trouble watching 6 DVDs a week that I can get for the $20/month. I get 3 new releases every Tuesday from my local store, 1 mile away. That's sure better than getting old DVDs from redbox for one night or netflix slow mail delivery. My DSL isn't fast enough to download movies. I always wonder when i read something like this and then see that the poster is a newbie if it's a "ringer" from a company doing spin controll. Like maybe this guy is a store owner trying to hype it up. It's just so suspect when the company is universally hated and one brand new poster comes from out of nowhere to praise it. Dave I'm with you.... I would much rather get the new releases on the day they're released, not a month later. And NO jooky....I don't work for BB. Just a satisfied with their convenience customer. It may not be a business model for everybody, but for others like us it does work. Maybe people should be looking at management to see why they're losing money. I guarantee the honchos in charge are gonna walk away with alot of money in their pockets!!

  26.2.2011 11:21 #14

• Jdub28 (unverified)

  Originally posted by KillerBug: I almost bought bb stock when it hit 0.40, but then I looked at the debts, the low income, and the bad name, and realized that the stock wasn't worth as much as toilet paper. Thats sucks because the stocks at a penny now, and Dish owns it so all the debt is with Dish who is a 26 dollar stock and has $12 Billion in market cap I disagree with all the people that say BlockBuster is done. Stock buying 101 is not buying the stock when it up but when it down and you can make good gains on a risk though not a for sure. The stock is Bliaq.BB I'm telling you there cheaper then Netflix they have more games and movies and they have store location you can go into there is no other movie store in the US that you can do that.. Look at the big picture I agree with you Risky but I truly believe Dish Advertising will Bring it back to at least 50%

  19.12.2011 04:14 #15

• Jdub28 (unverified)

  Originally posted by KillerBug: Originally posted by wiseguy0: You're probably right to be cynical, Jooky, but I have the mail service and love it too. More movies than I can watch, new releases faster, and now games at no extra charge! The on demand streaming sucks, but I only want to watch movies in their uncompressed dolby digital glory anyway. I use the streaming a whole lot more than the disks; I too get 6 disks a week; blockbuster may have the "edge" by allowing you to drive down to the store for returns...but that isn't much of an edge when the closest 6 stores are all now pawn shops. Anyway, netflix turnaround time is only 3 days, and the post office works 6 days a week...so I get the same service without needing to drive to the store for returns.
  
  ...I guess netflix is a bit slower on getting new movies...I really don't notice too much...there are not many new titles that I am just dieing to see ASAP and can't wait a month for.
  
  The games deal is nice...I don't know how well it is actually handled, but I figure it will either do well or force gamefly to adopt fair pricing. Either way, it is a good thing.
  Listen to me its all about competition, Dish is in this for the long all the bought Blockbuster for over 300 million, they are not going to just le BB go bankrup again, everytime I go to a store its packed its a company that can be profitable and its at a penny, you know what that means time to buy on 9/28/2011 stock went from 3 cents to 38 cents then dropped it was inside trading for sure but for the long run it will not go bankrupt to where the stock is broke you loose all your money, The stock will stay alive and it will give netflix a battle it has cheaper prices and if people are smart we should all buy it its a penny.

  19.12.2011 04:22 #16

• Jdub28 (unverified)

  Another stock to buy for sure is ATIG.PK, its a online gaming website thats legal and is very profitable.It made a deal with the Indian Casino Reservations and they set up a gambling website that plays poker, slots, blackjack, anything at a regular casino just at home. The FED as approved it and the whole thing is a gambler gives the website $500 d0llars and plays all legal, lets say he win $1000 and wants to be paid well you just print out a ticket and go to your local Indian Reservation to get paid. This is huge it monitors cheating and you cannot cheat, if your an employee you cannot play or sign up its moniroed 24/7. ATIG.PK its cheap was a 3 cents 4 months ago now really cheap but with spreading the world buying the stock this is and will be winner

  19.12.2011 04:34 #17

• Jdub28 (unverified)

  Another stock to buy for sure is ATIG.PK, its a online gaming website thats legal and is very profitable.It made a deal with the Indian Casino Reservations and they set up a gambling website that plays poker, slots, blackjack, anything at a regular casino just at home. The FED as approved it and the whole thing is a gambler gives the website $500 d0llars and plays all legal, lets say he win $1000 and wants to be paid well you just print out a ticket and go to your local Indian Reservation to get paid. This is huge it monitors cheating and you cannot cheat, if your an employee you cannot play or sign up its moniroed 24/7. ATIG.PK its cheap was a 3 cents 4 months ago now really cheap but with spreading the world buying the stock this is and will be winner

  19.12.2011 04:34 #18

• Imsmart (unverified)

  Originally posted by jookycola: Confederated Slave Holdings
  LMAO!
  
  It cost more to rent 3 movies from a Blockbuster store than it does to get a Netflix account that lets me take out 3 at a time and not accrue ANY late fees. And if i watch and return the Netflix DVD's in 4 or 5 days i get 3 new movies free, and a week later 3 more again....FREE, and again. And in between waiting for the movies i can stream movies and/or TV shows on almost anything with a screen. All for the same cost as renting 3 DVD's from an actual BB Store
  
  Where as if you rent the 3 DVD's from Blockbuster you pay $20+ bucks and return them to rent 3 more for another $20+ bucks, and so-on and so-on. Anyone that would rather piss away money, risk unreal late fees, and be treated like a piece of crap rather than do Netflix is crazy. You can spend 8 bucks you get all rentals of dvds games and they will send you movies to, Netflix is the rip off its lost 55% of its business. If people change there perception said hey what place can you rent classic movies for you or for you to watch with your boy or daughter its only netflix we dont need an monopoly then they will own us with there pricing we want competition dish bought BB go throw a couple thousand in it at a penny you will make money

  19.12.2011 04:50 #19