FORT WORTH, Texas — RadioShack said the company-saving offer from Standard General is the best to emerge from an auction that tested the value of the distressed retailer, beating out rival offers that would see the company shut down.
The Standard General offer has picked up crucial backing from RadioShack’s official committee of unsecured creditors, which had threatened to derail the deal, new court filings said.
The word from the company came as it heads into a bankruptcy court hearing where RadioShack will ask a judge to sign off on the Standard General takeover, which would save much of the chain from liquidation. More than half the 4,000 stores RadioShack brought to bankruptcy have been shut down, but Standard General has said it will keep 1,743 stores open.
The deal with Standard General still faces a challenge from Salus Capital Partners, which contends it didn’t get a fair hearing at the auction on a materially superior bid it tried to make in an alliance with liquidators.
RadioShack said Salus’ bid is too chancy to consider, because $129 million of the cash in the offer would come from litigation and it’s not known how that will play out.
The firm called Salus’ bid “demonstrably inferior” to the one from Standard General and said it would urge Judge Brendan Shannon to sign off on a deal that now has no major impediments to closing.
Salus has said Standard General’s bid is also risky, because much of the financing for the takeover is in the form of an offer to cancel debts RadioShack owes it.
