Warner Bros. submits $33-million bid for Midway
Warner Bros. has submitted a $33-million bid to buy Midway Games, the creator of the Mortal Kombat, Wheelman and Spy Hunter video game franchises.
Midway spokesman Geoff Mogilner said the company expects other bidders to emerge in the next 30 to 45 days as the company winds its way through an auction process. He did not release the names of other potential buyers.
The Chicago company earlier this year filed for Chapter 11 bankruptcy protection after it was unable to meet its debt obligations.
Warner Bros., which has been bulking up its video game publishing business, would be acquiring several well-established game franchises, including Mortal Kombat, which has generated $1.5 billion in revenue since it was introduced in 1992 on arcade machines. The latest title in the series, Mortal Kombat vs. DC Universe, sold more than 2 million units.
The bid does not, however, include two of Midway's development studios -- one in Britain responsible for making the Wheelman driving games and another in San Diego that's currently working on a wrestling title called TNA Impact. The bid does include the intellectual property for Wheelman, which features actor Vin Diesel, but not the rights to develop the TNA wrestling game. That leaves open the possibility for other suitors to buy the remaining assets or to submit a more comprehensive bid.
Midway employs 75 people at its London studio and about 100 in San Diego.
The company's erstwhile majority owner, Sumner Redstone, last year sold Midway for $100,000 to a little known Massachusetts investor named Mark Thomas. The sale triggered large payment requirements on its long-term loans, including a $30-million payment to Thomas, that Midway was unable to make, pushing the company into bankruptcy.
Creditors earlier this month sued Redstone, Thomas and five board members, claiming that the sale was "fraudulent" because it was conducted solely to create a $700-million tax write-off for Redstone to the detriment of shareholders. The court-appointed creditors asked that Thomas, currently a debtholder, be classified as a creditor. In a bankruptcy case, creditors must wait to collect until after debtholders are paid from the proceeds of any sale.
-- Alex Pham