Standard General LP's reduced buyout offer of $145.5 million is RadioShack Corp's RSHCQ.PK only hope of surviving bankruptcy and staving off liquidation, the Wall Street Journal reported, citing the hedge fund's lawyers.
The offer is less than the earlier estimate of $200 million made by the hedge fund because the lead bidder is leaving hundreds of RadioShack stores behind, the Journal reported. (on.wsj.com/1B87GPN)
The deal with Standard is the only proposal that could save 9,000 jobs at the retailer, Standard General's lawyer Gregg Galardi said at a court hearing, according to the report.
RadioShack won bankruptcy court approval last month to auction about 2,000 of its stores with an initial $200 million bid from Standard General, which would have kept about half of the stores open and operate them under an agreement with Sprint Corp (S.N).
Standard General has now offered to take 1,723 outlets and requires RadioShack's proposed new owner to come up with only $18.6 million in cash. The rest of the offer is in the form of a "credit bid," or offer to cancel debt, the Journal reported.
Fort Worth, Texas-based RadioShack's bankruptcy filing came after years of losses as online retailers such as Amazon.com Inc (AMZN.O) gobbled up the chain's market share.
Representatives at RadioShack and Standard General were not immediately available for comment outside regular U.S. business hours.