Philadelphia Business Lawyers: Sprint Acquisition of RadioShack is Pending
RadioShack Corp. has been losing customers to online retailers and struggling to turn a profit in recent years. According to Bloomberg, RadioShack Corp. is negotiating the sale of some of its store leases to wireless carrier, Sprint Corp., as part of a bankruptcy deal. The balance of store leases unpurchased by Sprint would be closed. However, the terms of this acquisition could change or another bidder could surface before a deal is reached. The Sanpower Group, who took the chain of Brookstone stores out of bankruptcy, is also negotiating with RadioShack.
As a result of RadioShack failing to submit a business plan addressing compliance issues regarding New York Stock Exchange rules, the trading of RadioShack stock has been suspended. The value of RadioShack shares dropped off to 24 cents this week which amounted to a 90% loss of its value from 12 months ago.
Sources say that RadioShack’s largest shareholder, Standard General LP, has offered the struggling company a reorganization loan, the terms of which include the sale of assets in a bankruptcy. A battle with lenders over control of the company could be avoided by liquidating the stores. One source claims that lender Salus Capital Partners LLC has presented RadioShack with an alternate financing plan. Spokespeople for RadioShack, Standard General LP, Salus at Integrated Corporate Relations Inc. and Sprint have all declined to comment on any alleged talks with RadioShack.
Sprint plans to acquire up to 2,000 of the 4,000 RadioShack locations. The CEO announced to investors at a Citigroup Inc. conference in January that Sprint has plans to expand the company by adding more retail locations to dramatically grow their distribution.
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