Vice Media is nearing a deal for senior lenders including Fortress Investment Group and Soros Fund Management to acquire the troubled media company out of bankruptcy at a valuation of around $400 million, according to people familiar with the matter.
Nearly every Vice stockholder—including backers such as private-equity firm TPG Group, Sixth Street Partners and media mogul James Murdoch —would be wiped out under the proposed reorganization, the people familiar with the matter said. Outstanding debts held by TPG and Sixth Street would also be impaired as part of the plan, the people said. The Murdoch family is a major shareholder in Journal parent News Corp.
The planned sale of the company to its lenders would value Vice at around $400 million including debt, the people said, a steep drop from its peak valuation of $5.7 billion in 2017. The final purchase price could also change as part of negotiations between the company and the lender group, the people said.
[Worth noting: Soros was a major part of a consortium that helped bail out Vice almost exactly four years ago with an emergency cash infusion of $250 million. This looks like throwing good money after bad, or any kind of sunk-cost fallacy argument one wants to make. That’s especially true since Fortress reportedly wants to keep current management at Vice in place despite its abysmal performance over the last several years. One has to wonder what value Soros sees in Vice, because it doesn’t look like a financial decision. — Ed]
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