A group of Vice‘s lenders are set to buy the bankrupt youth media business with a $225m all-credit bid.
The lenders, which include Fortress Investment Group, Soros Fund Management and Monroe Capital, bid for the company last month using the secured debt they hold over the company rather than cash.
Their offer was accepted despite the submission of a much larger $300m bid by conglomerate Go Digital.
The New York Times reports Go Digital was one of several bidders, but none of the competing offers met requirements Vice Media set for buyers. Go Digital’s bid specifically was scuppered because “Fortress wanted more cash in the offer and had concerns about Go Digital’s funding”, according to CNBC.
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A spokesperson for the failed bidder told CNBC: “Our offer was significantly more than the stalking horse bid by the sellers. The sellers chose to turn down this opportunity even though it was a bid higher than their own.”
What happens next at Vice?
The lenders’ bid will go before a bankruptcy judge on Friday who will decide whether the deal is likely to be in the interests of the business. A note to Vice staff from co-chief executives Hozefa Lokhandwala and Bruce Dixon that was seen by the NYT said they expect the sale to close next month.
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An anonymous source told The New York Times that buyers have already approached Fortress with an interest in parts of Vice Media and that the investment management firm “could consider selling some of the company to recoup its investment”.
Vice Media sprawls over numerous properties beyond the central Vice brand, including its young women’s brand Refinery29, media agency Virtue, culture magazine i-D and production house Vice Studios.
Vice declared bankruptcy under Chapter 11, meaning it is able to remain in business and reorganise rather than being liquidated. However, staff cuts were already underway at the company the month before the bankruptcy announcement, and opposition to proposed redundancy terms in the UK means Vice is set to face a 48-hour strike in the country at the end of June.
[Read more: Vice Media – From Murdoch money to bankruptcy in a decade]
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