RadioShack’s (RSH) sale of about 2,000 stores to a hedge fund is worth $200 million, an advisor to the electronics retailer told a U.S. Bankruptcy Court on Wednesday.This was the first time the bankrupt company has put an estimated value on the sale agreement with Standard General, which will keep about half of RadioShack’s stores open and operate them under an agreement with Sprint (S).At the same hearing, RadioShack lawyers said the company had received bids for leases to 205 of the 1,100 locations it plans to close this month, including interest from a unit of the GameStop (GME) retail chain.The lawyers also said the company’s name and intellectual property would be auctioned separately and that Standard General agreed to an initial bid of at least $20 million.RadioShack filed for bankruptcy earlier this month after struggling for years with falling sales in the face of online competition.
On Wednesday, RadioShack’s lawyers asked U.S. Bankruptcy Judge Brendan Shannon in Wilmington, Delaware, for approval of an auction process that would allow other potential buyers to challenge the sale to Standard General. The hearing was still under way in the afternoon.
Standard General is planning what is known as a “credit bid,” using the $55 million it is owed on RadioShack loans to help pay for the stores.
Standard General also plans to offer loans held by other hedge funds, which could bring its credit bid to $130 million, according to David Kurtz, who heads up the restructuring practice of the Lazard Ltd, which is advising RadioShack.
He said Standard General would bid $75 million in cash.
RadioShack’s lawyers said the company was slowing the sale process to ease creditors’ concerns that rushing it would discourage potential buyers. The company had planned to hold the auction no later than March 16 but postponed it to March 23, with a hearing to approve the sale now set for March 26.
While Wednesday’s hearing was under way, RadioShack was holding an auction for the leases to the 1,100 stores it will close this month.
RadioShack lawyer Tom Howley said GameStop’s Spring Communications was interested in some locations and called this a “significant development” without elaborating.
GameStop has been aggressively expanding its Spring Mobile business, which sells AT&T cellphones.