UPDATE 4-Blockbuster takeover bid by Dish wins judge’s OK

* New York bankruptcy judge OKs $320 million bid

* Ergen’s Dish beat out Icahn at bankruptcy auction

* Blockbuster CEO sees Dish assuming many store leases
(Adds transaction close date, Dish closing share price)

By Dena Aubin

NEW YORK, April 7 (Reuters) – Satellite television company
Dish Network Corp(DISH.O: Quote, Profile, Research) can go ahead with its $320 million
purchase of Blockbuster Inc(BLOAQ.PK: Quote, Profile, Research), a bankruptcy judge ruled
on Thursday.

Judge Burton Lifland’s approval gives Dish, led by
billionaire Charlie Ergen, control of the one-time video rental
leader’s 1,700 stores — a new way to market Dish’s services.

Dish put in the winning bid for Blockbuster at an auction
earlier this week at U.S. bankruptcy court in Manhattan.

The company beat out activist investor Carl Icahn, South
Korea’s SK Telecom Co (017670.KS: Quote, Profile, Research) and a group of hedge funds
led by Monarch Alternative Capital LP.

Proceeds of the sale will help pay off Blockbuster
creditors who are collectively owed more than $1 billion. These
creditors include Icahn, other bondholders and movie studios,
among others.

Jim Keyes, Blockbuster’s chief executive, said after
Thursday’s court hearing that he was pleased with the sale,
especially because Dish has said it plans to keep Blockbuster

Speaking to reporters, Keyes declined to say how many
stores will remain open but said he expects Dish to assume a
significant number of leases. Blockbuster’s DVD rental kiosks,
operated by NCR Corp(NCR.N: Quote, Profile, Research), are also expected to stay in
business, he said.

Blockbuster helps broaden Dish’s business beyond its
satellite service and could help transform the company into a
major provider of on-demand video, analysts said. For details
click on [ID:nLE7F6164].


Other potential buyers included liquidators that were
expected to close Blockbuster had they won the auction.

Blockbuster employs roughly 16,500 people in the United
States and 12,800 people elsewhere, Keyes said.

The sale is expected to close on April 25, Dish said in a
statement on Thursday. A spokeswoman for Dish did not
immediately respond to a phone call seeking further comment.

More than 100 parties had filed objections to the sale with
the court, including landlords seeking assurance that Dish
would honor and pay sums owed on Blockbuster’s leases. Many of
these sums remain in dispute.

Blockbuster asked that the objections be dealt with at a
later date, and the judge agreed.

“It was not clear until very recently that the successful
bidder contemplated an ongoing business model” rather than a
liquidation, Lifland said.

He added that Dish’s $320 million bid was “fair and
reasonable,” and in the best interest of Blockbuster creditors
and the bankruptcy estate.

Blockbuster filed for bankruptcy in September. It decided
to put itself up for sale in February after a plan to
reorganize fell apart as losses mounted.

As of Feb. 27, Blockbuster’s assets included more than $100
million of receivables and cash and a rental library estimated
to be worth $175 million. Other assets include customer lists
and rights to stream movies over the Internet.

Lenders including Icahn that had provided Blockbuster a
$125 million bankruptcy loan will be paid in full as part of
the sale, Stephen Karotkin, a lawyer for Blockbuster, said at
the hearing.

Dish’s shares fell 37 cents or 1.5 percent to $23.95 on

The case is in re: Blockbuster Inc, U.S. Bankruptcy Court,
Southern District of New York, No 10-14997.
(Reporting by Dena Aubin; additional reporting by Jon Stempel
and Tom Hals; editing by John Wallace, Dave Zimmerman and
Bernard Orr)

UPDATE 4-Blockbuster takeover bid by Dish wins judge’s OK