WEST SACRAMENTO, Calif. (AP)—Bidding to purchase the ailing Tower Records chain will start at about $90 million, about half the sum the company rejected two years ago from a potential buyer.
Tower officials this week said the company had received a bid of between $90 million and $95 million from Great American Group, a liquidating firm that has been designated as the “lead bidder” in the West Sacramento-based music retailer’s court-supervised bankruptcy auction.
Other bidders will have to surpass Great American’s bid during the auction, which will take place Oct. 5 in Delaware.
Tower had been up for sale since February and is currently paying cash for its products. With the holiday shopping season approaching, the company is pushing the U.S. Bankruptcy Court to approve a quick sale.
Tower’s business has been hurt in recent years by giant discount retailers such as Wal-Mart and the growth of Internet music downloading. It filed for bankruptcy once before, in 2004, but ultimately rejected a purchase offer for $170 million, according to Billboard magazine.
Great American’s current bid is only for Tower’s inventory. Those who want to keep Tower alive hope the whole company is eventually purchased, which is expected to add to the total price.Bids would have to increase significantly beyond $90 million to cover the retailer’s roughly $210 million in debts.