Warner Bros. Steps in as Midway Bidder
The media conglomerate emerges with a $33M bid at a time when content value has been shrunk.
May 22, 2009
Midway Games, the bankrupt video game maker, has entered into a stalking horse agreement with Warner Bros. Entertainment to sell its assets for $33 million.
Lazard is serving as the financial advisor for the process and will entertain bids as soon as bidding procedures have been approved in bankruptcy court.
For $33 million, provided no other bid tops it, Warner Bros. will get Midway’s Mortal Kombat franchise and Chicago and Seattle studios. Excluded from the deal are the company’s TNA franchise and its development studios in San Diego and Newcastle, England.
The bankruptcy sale comes at a time when content has seen value hit hard, as consumers cut back on discretionary spending and entertainment corporations have seen decreased demand thanks to a lack of advertisers. Industry executives have said that entertainment content portfolios have declined in value as much as 50% during the recession.
Former majority shareholder Sumner Redstone is still engaged in a court battle with the company’s shareholders who asserted that the CBS chairman breached his fiduciary duty when he dumped his 87% stake in Midway for less than $1 million. The other shareholders seek unspecified damages.
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