As Vice Media looks to sell itself later this month, insiders say the likelihood of finding an outside buyer is grim.
If the bankrupt gonzo news outfit doesn’t get an offer from an outside buyer at the auction slated for June 22, it will be purchased by its creditor including George Soros’s Soros Fund Management and Fortress Investment for $225 million, according to court documents.
But sources close to Soros and Fortress say neither financial group ever anticipated having to run the media company and that they’ve been caught flat-footed by the media company’s bankruptcy filing.
“This is the nightmare scenario for them – they never thought it would come to this,” a banking source said.
While the company had hoped to make itself more appealing by shopping itself in parts, Vice may not even be able to sell the assets individually. One source said there is a potential buyer for Refinery29.
Group Black, which had explored bidding $400 million on Vice earlier this year and was seen as one of the only candidates who would consider a deal, is no longer interested, a source told On The Money. Group Black has now shifted its focus to a potential bid for BET Media Group.
Many of the same media insiders who were predicting its bankruptcy months ago say it’s no surprise Vice isn’t getting much interest.
Stay On the Money
Essential weekly read to fuel business lunches.
“What media or finance executive is going to risk their career in order to buy Vice? Look how many careers it has already destroyed,” one media insider told On The Money.
“It’s so toxic that even if it was free I don’t know if anyone would want it.”
However, a spokesperson for the company said things are going well, “The premise of this story is 100% false.” Group Black declined to comment.
The hope had been that bankruptcy would make Vice’s assets more palatable since a buyer wouldn’t be taking on debt.
“Sometimes bankruptcy is the only way to get a sale — and it seems like that’s what they’ll have to do because they haven’t been able to get the bride to the altar to close a deal,” Perry Mandarino, co-head of restructuring and at B. Riley Securities, told On the Money.
“In bankruptcy, a buyer can cherry-pick the assets and liabilities it wants to buy and assume,” Mandarino added.