Dish Network to Buy Blockbuster Assets After Winning $320M Bid

Company beats out Icahn, Cobalt Video; expects to ultimately pay $228M cash

Last Updated: April 6, 2011 @ 7:02 AM

Dish Network announced Wednesday that it placed a winning $320 million bid to buy all of Blockbuster's assets.

Dish, Carl Icahn, and Cobalt Video, a consortium of lenders, bid into Tuesday night for the bankrupt video chain's assets. SK Telecom Co. dropped out after the price tag for the Dallas-based chain climbed above $300 million.

Dish said it expected the deal to close this quarter, and that it would pay about $228 million in cash after adjustments for available cash and inventory.

"With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for DISH Network," said Tom Cullen, executive vice president of sales, marketing and programming for Dish. "While Blockbuster's business faces significant challenges, we look forward to working with its employees to re-establish Blockbuster's brand as a leader in video entertainment."

Blockbuster filed for Chapter 11 last fall, after struggling under nearly $1 billion in debt for much of the past year. It listed the major studios as its unsecured creditors.

It puts itself up for sale in February after it was unable to agree to a recapitalization plan with its creditors.

A minimum $290 million was set for the sale, which will have to be approved in court on Thursday.

Icahn was a longtime investor in the bankrupt rental chain, and gave the company a loan that helped it operate after it first entered bankruptcy.