Dallas-based Blockbuster Inc. agreed on Monday to a $290 million offer by a group of investors to bring the video rental company out of bankruptcy. The group includes some of Blockbuster’s largest creditors.
Blockbuster hopes the deal, known as a "stalking horse" bid, is just an initial offer that will lead to an auction and a higher purchase price.
But some experts cautioned it could also lead to the end of the once-dominant movie rental giant.
“The creditors want their money somehow, whether they get their money by selling Blockbuster to someone else or just liquidating the company,” said Mike Davis, a professor at SMU’s Cox School of Business.
The bankruptcy judge overseeing the company’s reorganization must approve the sale and auction.
In a statement, Blockbuster said it expected to finalize a deal by April 20.
Davis said Blockbuster is still a big brand and enjoys a loyal following of customers who prefer to rent DVD’s from a store.
But he added that predicting the company’s future is difficult.
“We live in this world where a business that's viable one year can just be in big trouble the next,” Davis said. “Technology changes that fast. So there's certainly the possibility -- I don't think it'll happen -- but there's the possibility that Blockbuster will just disappear."