Bankrupt Blockbuster puts itself up for sale

By Charles Riley, staff reporter


NEW YORK (CNNMoney) -- Bankrupt home video chain Blockbuster put itself up for sale Monday, saying it has received an offer of $290 million dollars for the business.

Blockbuster said it filed a motion in U.S. Bankruptcy Court in New York that asks for authorization to start an auction process, for which it already has an opening bid.

The $290 million initial offer was made by an investor group consisting of Monarch Alternative Capital, Owl Creek Asset Management, Stonehill Capital Management and Värde Partners, all of which are creditors of the once mighty chain.

The movie rental store's U.S. businesses filed for Chapter 11 protection in September, hoping to sharply reduce their nearly $1 billion debt.

"By initiating a sale process at this time, we intend to accelerate our Chapter 11 proceedings and move the company forward," CEO Jim Keyes said in a statement. "An auction will allow the company to invite competing bids from both strategic and financial investors."

If the auction proposal is accepted by the court, additional offers will be accepted for 30 days, and a final sale would take place before April 20.

Normal store operations will continue during the sale, the company said.

Blockbuster has struggled for survival ever since media conglomerate Viacom spun off the company in 2004. As a part of the deal, the company had to pay Viacom shareholders a $5 per-share dividend, and the movie rental giant racked up about $1 billion of debt in the process.

The company also suffered losses from unprofitable stores and increased competition from both Netflix (NFLX) and Coinstar's (CSTR) Redbox. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,279.74 13.75 0.08%
Nasdaq 4,579.79 -13.64 -0.30%
S&P 500 2,010.40 -0.96 -0.05%
Treasuries 2.59 -0.04 -1.60%
Data as of 8:27am ET
Company Price Change % Change
Microsoft Corp 47.52 0.84 1.80%
Bank of America Corp... 16.95 -0.09 -0.53%
Oracle Corp 39.80 -1.75 -4.21%
The Coca-Cola Co 42.05 0.26 0.62%
Cisco Systems Inc 25.20 -0.02 -0.08%
Data as of Sep 19

Sections

7,000 Ravens fans traded Ray Rice jerseys for one with another player's name. The team gave vouchers after it ran out of replacement jerseys. More

Gen Xers have higher salaries than their parents, but they have so much debt that they have a hard time saving, investing and buying homes. More

It's really good to be Larry Ellison. The Oracle founder is stepping down as CEO, so maybe he'll have more time to enjoy his glamorous life. More

As Occupy Wall Street goes on its debt-abolishing tear, thousands of people across the country are begging them to forgive their loans. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.