Standard General Said to Prevail in Bidding for RadioShackLauren Coleman-Lochner, Jodi Xu Klein and Dawn McCarty
Standard General LP prevailed in a bid for the assets of bankrupt electronics retailer RadioShack Corp., according to people familiar with the situation.
Standard General was RadioShack’s largest shareholder and provided a $535 million rescue-financing package to the Fort Worth, Texas-based retailer last year. RadioShack subsequently filed for bankruptcy protection in February. Any sale requires approval of the bankruptcy court in Wilmington, Delaware.
RadioShack entered bankruptcy in February with a plan to have a Standard General affiliate take over as many as half its approximately 4,000 stores in a co-branding arrangement with Sprint Corp. The final package as announced before the auction began in New York Monday included about 1,700 RadioShack store leases, with inventory the retailer valued at $129.8 million.
Standard General’s opening offer was valued at $145.5 million, which included a so-called credit bid of $117.5 million, meaning the buyer would hand over debt in that amount rather than pay cash.
Salus Capital Partners, another RadioShack lender, submitted a preliminary bid on Tuesday, the people familiar with the situation said. The bid came in lower than Standard General’s and is similarly structured to be paid in part with the debt Salus owns, one of the people said.
Phil Denning, a spokesman for Salus at Integrated Corporate Relations Inc., didn’t immediately comment.
Adam C. Harris, an attorney at Schulte Roth & Zabel LLP representing Cerberus Capital Management, a co-lender with Salus, said last week that the “lenders will submit a protective credit bid.” The bid is to “protect our downside” and the firms are “really not interested in owning these assets,” Harris said at the time.
Salus, as agent for some lenders, had asked the bankruptcy court to cap Standard General’s credit bid at $111 million, which it said was the amount of the loans held by the firm that have a high enough claim on the retailer’s assets.
Standard General isn’t the only investor with plans to use some of RadioShack’s real estate to sell phone service. Spring Mobile, a unit of GameStop Corp., the video-game chain, won a previous auction for the right to take over about 160 stores. Spring has about two months to decide which of the locations it wants to keep.
The case is In re RadioShack Corp., 15-10197, U.S. Bankruptcy Court, District of Delaware (Wilmington).