* Says to pay $228 mln in cash
* Bid still needs nod from bankruptcy court
(Adds details, background)
BANGALORE, April 6 Dish Network Corp
won Blockbuster Inc in a bankruptcy auction for about
$320 million, a move that could see the second-largest U.S.
satellite TV provider tapping the movie rental chain's online
content to strengthen its offerings.
Dish, led by satellite billionaire Charlie Ergen, trumped
at least three other bidders, including activist investor Carl
Icahn, for the one-time leader in video rentals.
Dish might find Blockbuster's online content appealing as
the company could use it as a base for an online product to
deliver movies. [ID:nN04274852]
The deal marks the second purchase of a bankrupt company by
Dish. Last month, Dish got a nod from a bankruptcy court to buy
hybrid satellite and land-based communications company DBSD
North America for about $1.4 billion. [ID:nN15251866]
Ergen struck his first deal of the year in February when
digital set-top box maker EchoStar Corp , where he is
the chairman, agreed to buy Hughes Communications , one
of the world's largest providers of broadband satellite
services, for $1.33 billion. [ID:nL3E7DE0TR]
Dish Network said in a statement early on Wednesday it
expects to pay about $228 million in cash to acquire
"Blockbuster will complement our existing video offerings
while presenting cross-marketing and service extension
opportunities for Dish Network," said Tom Cullen, executive vice
president of sales, marketing and programming for Dish Network.
Blockbuster had a market cap of more than $5 billion at its
peak in 2002, but came under pressure from mail-order and
digital competitors such as Netflix Inc . The company
filed for bankruptcy in September and put itself up for sale in
February after a reorganization plan fell apart.
The winning bid must still be approved at a hearing in
federal bankruptcy court on Thursday.
A $308.1 million bid from Cobalt Video, a group of hedge
funds headed by Monarch Alternative Capital LP, was the highest
bid before the auction was moved to an attorney's office not
open to the press.
Icahn had bid $310.6 million, but his bid included less
money than Monarch's for notes rolled up into a bankruptcy loan
and was thus considered a lower bid.
(Reporting by Sakthi Prasad and Supantha Mukherjee in
Bangalore; Editing by Sriraj Kalluvila)