Washington: Digital-media disruptor Vice Media is preparing to file for bankruptcy if it fails to find a buyer, according to The New York Times, citing two people with knowledge of its operations.
Investing giants digital media disruptors such as Disney and Fox could file for bankruptcy in the coming weeks, according to three people familiar with the matter, who were not authorized to discuss the potential bankruptcy on the record.
The New York Times reported that the company is struggling to find a buyer to avoid declaring bankruptcy but there is still a chance the company may find one. More than five companies have expressed interest in acquiring Vice, according to a person with knowledge of the discussions. A person with knowledge of the possible bankruptcy said, however, that the prospect of that is becoming increasingly less likely.
According to the New York Times, the bankruptcy filing would be a bleak coda to the tumultuous story of Vice, a new-media entrepreneur who persuaded the media establishment to invest hundreds of millions of dollars before trying to scuttle it.
In 2017, Vice was valued at US$5.7 billion, following a funding round from private-equity firm TPG. But today, by most accounts, it’s worth a tiny fraction of that.
One of the people said that in the event of bankruptcy, Vice’s largest creditor, Fortress Investment Group, could control the company.
Vice will continue to operate as normal and will run an auction to sell the company over a period of 45 days, with Fortress in the lead position as the most likely acquirer.
And Fortress has senior debt, meaning it gets paid off first in the event of a sale, unlike Disney and Fox, which have already written off their investments and are not receiving returns, the person said. “Vice Media Group is engaged in a comprehensive evaluation of strategic options and planning,” Vice said in a statement Monday.
“The company, its board and stakeholders continue to be focused on finding the best path forward for the company,” the statement said. Vice began as a punk magazine in Montreal two decades ago. Over the years, it grew into a global media company with a film studio, an advertising agency, a glossy show on HBO, and bureaus in far-flung world capitals.
Disney explored buying the company in 2015 for more than $3 billion, according to the New York Times, after investing hundreds of millions in Vice, according to two people familiar with the talks.