ShopNBC Auction Moves Forward
Decision Expected By End of Fiscal Year
By Mike Farrell -- Multichannel News, 11/19/2008 9:45:00 AM
ValueVision Media said Wednesday that it has received interest from several different parties who want to buy all or part of its ShopNBC unit and should decide what to do with the home-shopping within the next several months.
The announcement comes on the heels of a federal filing by shareholder GE Capital that it is looking for ways to participate in the auction for the shopping network.
On a conference call with analysts Wednesday to discuss its third quarter results, George Vandeman, chairman of ValueVision’s special committee of independent directors, said the company has received bids from a number of companies and is aware of the Nov. 17 GE filing.
He added that the committee has instructed its advisers to invite several of the proposed buyers to take part in the next phase of the process—which would involve management presentations and more detailed due diligence information. Final bids would be due after that phase is completed.
Vandeman said the committee also is evaluating other alternatives to boost value, including share buybacks, paying a dividend and monetizing its balance sheet.
“The special committee and its financial advisors continue to review the full range of strategic alternatives available to the company. We anticipate that the special committee will conclude its review by the end of the fiscal year,” Vandeman said. ValueVision’s fiscal year ends Feb. 2.
In September, the company said it had formed a special committee of independent directors to evaluate its options (including a sale) and that it had hired Minneapolis-based Piper Jaffray & Co. as financial advisor.
In its filing with the Securities and Exchange Commission on Nov. 17, GE Capital said that it and another General Electric Co. unit—NBC Universal—are evaluating how they can participate in the process. Combined, GE Capital and NBC Universal own about 11.8 million ValueVision shares—or about 30% of the total shares outstanding.
The Nov. 19 conference call was brief, clocking in at under 30 minutes. ValueVision chairman and CEO John Buck said on the call that because the review process is ongoing, there would be no question-and-answer portion to the call. He vowed to have one in a later call before the end of the fiscal year.
“I know you have a lot of questions and are anxious for more details,” Buck said. “I promise you that we will hold another investor call as soon as we are able to communicate the outcome of the strategic review process and the future of this business.
The third quarter was another rough one for ShopNBC.
Revenue plunged 32% in the third quarter to $124.8 million and net losses more than tripled to $20.8 million on a 27% decline in volume and a 12% dip in the average price of items sold. This is after a 26% decline in revenue in the second quarter.
“As you can see from the results, ShopNBC experienced a very difficult third quarter,” CEO John Buck said on the conference call. “With our third quarter results and our stock price below $1, I can only imagine how frustrated and concerned you are, as we are. This is unacceptable.”
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