Dive Brief:
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A bankruptcy-court judge Wednesday approved a March 23 auction for some 1,700 stores (about half of the 4,000 RadioShack stores nationwide) with a starting bid of $200 million, offered by hedge fund Standard General. Judge Brendan Shannon also approved a separate sale, with a bid starting at $20 million, for the RadioShack name alone.
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Standard General, a major RadioShack lender and investor, will use what it is owed by the electronics retailer to help pay for about half of the retailer’s stores, which it may run with mobile company Sprint. GameStop, which is interested in expanding its Spring Communications business, said it will also bid. Meanwhile, plans for stores slated to be closed will be considered Friday.
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Standard General's $55 million credit bid arrangement could be boosted to $130 million by using other debt held by other investors, according to reports. Standard General will also bid $75 million in cash.
Dive Insight:
The bankruptcy process that is putting value on RadioShack’s assets and accepting bids has been delayed somewhat—the auction for stores that are to remain open will now be held March 23—in order to assuage creditors’ concerns that Standard General was rushing things to its own advantage. The hedge fund is a major RadioShack investor and lender, and the judge and creditors are looking a bit askance at its approach to use credit to help pay for its takeover.