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$33 million ‘stalking horse’ agreement between Midway and Warner

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In the wake of current global crisis, gamers have at least got a glimpse of financial jargon. With the fate of Mortal Kombat franchise hanging in the balance, I’ve to tell you a little something about a stalking horse asset purchase agreement. In this type of agreement, debtor seeks to maximize the value of his assets by entering into an initial agreement with the bidder that it chooses. The company facing bankruptcy then offers bidding protection to the bidder in order to set an initial bid that’s profitable for the assets being sold. With that out of the way, I can get to the actual news. Midway Games has entered into a “stalking horse” asset purchase agreement with Warner Bros. Entertainment Inc. that’s reportedly worth $33 million. Midway has also set the ball rolling by going to the U.S. Bankruptcy Court. This paves way for other interested parties to make counter offers. The agreement between Midway and Warner provides for a takeover of Midway’s development studios in Chicago and Seattle, as also the MK franchise. Midway’s studio in San Diego, Newcastle and the TNA franchise games, however, are not a part of the proposed arrangement. What this may mean for Mortal Kombat I’m not too sure. But indications are that the series would, after all, be in good hands.

Via: gamepro

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