After filing for Chapter 11 bankruptcy in May, Vice Media is set to be acquired by its lenders Fortress Investment Group and and Soros Fund Management.
Vice representatives declined PvNew‘s request for comment Thursday, however, an internal memo was sent out to employees confirming the deal with its own backers, as first reported by the New York Times, is slated to close July 7.
A court hearing is scheduled for Friday during which Fortress’s winning $225 million bid (Vice was valued at $5.7 billion in 2017) for Vice is set to be approved. At that point, the sale will still need to clear a regulatory approval process to be finalized.
Cash-strapped Vice Media has been searching for a buyer over the past year, to no avail. In February,Nancy Dubuc announced her exit as CEO after almost five years. The company subsequently appointed longtime execsBruce Dixon and Hozefa Lokhandwala as co-CEOs.
According to one source, privately held holding group GoDigital Media put in a bid for Vice that was $75 million more than the “stalking horse” bid of $225 million from Fortress, however, the cash component requested by Fortress was deemed “unreasonable” by GoDigital leadership.
Per that insider, GoDigital adjusted its bid following several recent material disclosures with less than 12 hours before the bankruptcy auction was set to take place.
In a statement provided to PvNew Thursday, GoDigital said:
“After exhaustive negotiations and diligence, GoDigital Media Group developed a plan not just for the survival of Vice and its brands, but for their rejuvenation, growth, and expansion. We put in a bid that properly reflects a future where everyone has a stake, and also reflects new economic and financial realities that came to light in the final weeks and days. Going forward will require significant time, money, and expertise, and it was our hope the seller debtors would join us in partnership where we both align and invest. We even worked until the last minute to make adjustments that would help meet a productive compromise. However, at the end of the day, the sellers and we have different values.
Our offer was significantly more than the stalking horse bid by the sellers. Our approach included a concrete plan with real, renewed leadership, expertise, and investment that would have led to a profitable Vice in under 12 months. Ours was the best plan— in spite of Fortress saying they submitted the only bid —to right size the company to the benefit of Vice and its brands, employees, partners, and consumers. The sellers chose to turn down this opportunity even though it was a bid higher than their own.
The level of thinking required to solve a problem is typically greater than the level of thinking that created the problem itself. In our opinion, a continuation of the leadership that was a part of Vice’s journey to bankruptcy runs directly counter to the integrity and accountability now demanded in business. We think Fortress’s decision is the wrong choice, and the company, employees, partners, and consumers will suffer.
We believe the choice for Vice’s future is clear. We remain ready to acquire the company on fair and reasonable terms where all parties come to the table focused on the best benefit of the company.”
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