Vice Media has announced that Fortress Investment Group has been declared the winning bidder for the company as it prepares to emerge from bankruptcy. Fortress, leading a group of lenders, offered a $225 million stalking horse bid for Vice when it entered bankruptcy protection back in May. The group later increased its offer to $350 million, as stated in court papers filed on Thursday.
Various bids were submitted for the company, but none of them “rose to the level of being deemed a superior bid,” according to an internal memo obtained by CNBC. GoDigital, which is closely held, submitted one of the bids at a $300 million valuation. However, Fortress wanted more cash in the offer and had concerns about GoDigital’s funding.
GoDigital issued a statement saying: “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.” GoDigital’s chief strategy officer, Craig Greiwe, added that the company “remains ready to acquire Vice on reasonable terms and had demonstrated the financial ability to do so as part of this process.”
Fortress was part of a consortium of lenders, including Soros Fund Management and Monroe Capital, that provided financing to Vice in 2019. Vice filed for bankruptcy with a credit bid from the group. Fortress and the lenders were prepared to take control of Vice after failed sale processes before the filing. Fortress had become one of the leaders of the pre-bankruptcy sale processes, CNBC previously reported.
The bankruptcy-run auction, which was cancelled since no other bids were deemed qualified, was a way of checking the market to see if the company’s assets could get a higher valuation, according to a person familiar with the matter. The lender group will likely own the company for the next two-to-three years before trying to offload it once again. In the meantime, the new ownership will look to further shave off the business, and will entertain offers for individual assets, the person added.
Vice will present the sale to bankruptcy court on Friday and expects the acquisition to close then, the company said in the memo. The sale marks the end of a chapter for the digital media company, which was valued at $5.7 billion in 2017. Vice owns a series of assets, including Vice News, Vice Studios, Refinery29 and an ad agency called Virtue.
Spokespeople for Vice and Fortress declined to comment on the acquisition.
Leave a Reply