AccessMyLibrary provides FREE access to millions of articles from top publications available through your library.
Dish Network emerged last week as the winning bidder for Blockbuster, besting offers from activist investor Carl Icahn and a group of bondholders by agreeing to pay $320 million for the troubled video chain.
But now with the struggling retailer in hand--the deal was approved last Thursday by the U.S. Bankruptcy Court for the Southern District of New York, and is expected to close in the second quarter--analysts are split on whether to call this one a stud or a dud.
Investors also appeared to be on the fence. Shares in Dish Network gained a penny each last Wednesday (April 6), closing at $24.32, up 0.04%. The stock was down 37 cents each (1.5%) to $23.95 last Thursday.
On one hand, the Blockbuster buy looks like another in a growing line of bargain pickups for Dish--it acquired hybrid satellite and terrestrial communications company DBSD North America in March for $1.5 billion. On the other, it appears like Dish paid a low price for a declining asset that will only drag it down.
Just how low-priced was this deal? Viacom paid $8.4 billion for Blockbuster in 1994, using its substantial cash flow at the time to finance the acquisition of studio Paramount Pictures that same year. Viacom …