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.