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Systemax Inc. has made a $6.5 million bid for CircuitCity.com, the Circuit City name and other assets of bankrupt Circuit City Stores Inc. A judge is slated to rule on a final May 11 auction date this week.
Systemax Inc., operator of TigerDirect.com and CompUSA.com, is the latest bidder for CircuitCity.com and other intellectual property assets of Circuit City Stores Inc., which filed for bankruptcy last fall and closed all 600 of its U.S. stores in March.
In a new filing with the U.S. Bankruptcy Court for the Eastern District of Virginia, Systemax made a $6.5 million “stalking horse” bid and purchase agreement for CircuitCity.com, the Circuit City brand name and other intellectual property. A stalking horse bid occurs when an interested buyer is chosen by a bankrupt company as the preferred acquirer of its assets; the bid closes the door on very low bids for the assets up for sale.
In its bid, Systemax is also asking for a share of the future revenue generated utilizing Circuit City`s e-commerce assets over a 30 month period. "Systemax believes the transaction, if completed, would further extend its position as a leader in online retailing of value-priced, branded consumer electronics," the company says.
A final auction of the CircuitCity.com name and other assets could be held on May 11, according to the latest bankruptcy filing. A federal bankruptcy court judge is expected to rule on the auction date at a hearing later this week.
Systemax, No. 22 in the Internet Retailer Top 500 Guide, is the second company in recent months to bid for Circuit City’s brand and e-commerce assets. In February, Hilco Trading Co. Inc., which recently teamed with Gordon Brothers Brands LLC to purchase the intellectual property assets of Linens ‘N Things, including its web site, also put in a bid to acquire CircuitCity.com. “Hilco Consumer Capital and Gordon Brothers Brands are continuing to participate in the bid process,” Hilco vice president Paul Cohen tells Internet Retailer.
If Systemax is successful in acquiring CircuitCity.com, it would mark the second time in the last two years the company has acquired a recognizable online retail brand name. In 2007, Systemax acquired the assets of CompUSA.com for $18.9 million after CompUSA closed its doors permanently.