Dish wins Blockbuster auction (WSJ, BLOOM, NYP)

By Nancy Tartaglione

On Tuesday, Carl Icahn squared off against Dish Network CEO Charles Ergen "in a furious battle of the billionaires" to decide the fate of troubled video rental chain Blockbuster, The New York Post reported. But, according to Wall Street Journal sources, it was Dish that prevailed in the wee hours, with an offer of about $320.6 million. Dish confirmed the win in a press release this morning.

Both Icahn and Ergen had raised their bids in increments of $1 million into the night, which sent the auction price well above the $300 million mark. But Icahn, according to Post sources, appeared to be the more determined of the two.

The escalating Icahn and Dish jockeying was interrupted in the late afternoon by a bid from Monarch Capital worth $308.1 million plus $5 million in expense reimbursements.

SK Telecom had dropped out earlier in the day after offering $284.5 million.

The winning bid from Dish (which Bloomberg says came shortly after 3am NY time) will put about $178.8 million into Blockbuster creditors' coffers, according to The WSJ. (The Journal, incidentally, says the auction ultimately finished around 1:25am.)

Ergen is reported to be angling to use Blockbuster's brand and relationships in Hollywood to launch a video-streaming service, The Post said. Per a Journal source, Dish views Blockbuster as a "going concern."

The press release from Dish reads in part:

"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 Network. "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."

Related Links

Dish Network Wins Blockbuster (WSJ, sub)
Carl's Blockbuster bid (NYP)
Dish Network Said to Win Blockbuster Auction at $320 Million (BLOOM)
DISH Network Agrees to Acquire Blockbuster Assets