Tuesday, April 16, 2013

A Little More Commentary on Brother's Bid for Kodak

A lot of media outlets are reporting that Kodak Document Imaging has been sold to Brother for $210 million. I'm not certain whether or not this is actually the case. As I stated in yesterday's post, the Brother bid is actually a "stalking horse" bid, which is bankruptcy proceedings is technically the low bid in an auction that will take place following the acceptance of a stalking horse bid. The question that I cannot seem to find an answer to is what percentage of stalking horse bidders end up being the final buyer.

This piece does a nice job in explaining some of the "The Pros and Cons of Being A Stalking Horse Bidder for Assets In Bankruptcy." It explains that the stalking horse bidder has an advantage because it basically gets to sets the terms of the sale - what will be included and what will not - and once those terms are set, it's pretty hard to change them apparently. So, anyone else bidding is basically bidding on what Brother has carved out of Kodak as representing DI.

Somewhat related to that, here's what said George Conboy, president of Brighton Securities, had to say about the Brother bid. (I'm quoting from this Rochesterhomepage.com article.) "The price is a little bit light but what we can't be certain Kodak said it would be selling a certain portion of that business, probably majority but can't be sure what they are obtaining as of now."

One question, of course, is is Brother buying the Kodak brand for the DI products and services going forward?

If someone should outbid Brother, as the stalking horse it would likely be owed some sort of compensation, maybe something equal to a small percentage of the deal. I hope to have more later today - after an interview with Kodak executives.


paul e. szemplinski said...

While I agree with your thoughts about a printer / hardware company being a potential acquirer, I must admit this one caught be by surprise. A VC/ private equity type firm was first on my list. It ain't over 'till its over as they say ;-)



Anonymous said...

I think Kodak are playing the game, this is the best offer we have anyone want to beat it. Am sure no one will and Brother will start price fighting to win market share from one of he big players which will ensure one of the smaller companies will also be out if business before the end of the summer.


Fernborough said...

Kodak Announces Comprehensive Settlement with U.K. Pension Plan, Moving Kodak toward Exit from Chapter 11
Agreement Spins Off Personalized Imaging and Document Imaging Businesses to KPP, Settles $2.8 Billion in KPP Claims, and Funds Emergence of Commercial Imaging Business from Chapter 11

Kodak Press Release

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