Jump to content

THQ files for bankruptcy, Clearlake to bid for assets


Recommended Posts



SAN FRANCISCO (Reuters) - Videogame maker THQ Inc said on Wednesday it filed for bankruptcy protection, and entered into an agreement with private investment firm Clearlake Capital Group for a potential sale of its assets, in a bid to tackle its financial troubles.

The assets to be sold include THQ's four studios and games in development. The filing was made in U.S. bankruptcy court in Delaware.

Shares of THQ, which were briefly halted before the announcement, plunged 74 percent to close at 36 cents on the Nasdaq on Wednesday.

"They're currently in default of one of their credit lines, so it's not a huge surprise," said Mike Hickey, analyst at National Alliance Capital Markets.

Product delays and poor-performing products in a videogame market that is struggling to reverse flagging sales "kind of circled in aggregate to lead to their demise," Hickey said.

The Agoura Hills, California-based company said Clearlake was a "stalking horse bidder" or a potential buyer chosen from a pool of bidders to make the first bid.

This "allows other interested parties to come forward with competing bids," THQ said in a statement.

Foreign operations, including Canada, are not part of the bankruptcy filing, the company said.

Hickey said larger game publishers like Electronic Arts Inc or Ubisoft Entertainment SA might take a look at some of THQ's studios or intellectual property.

Known for its wrestling and "Saints Row" games, THQ has been losing ground to Activision Blizzard Inc and other larger rivals. Stockholders approved a 1-for-10 reverse share split of common stock in late June to raise the share price and avoid delisting.

THQ also said it has commitments from Wells Fargo & Co and Clearlake for financing of approximately $37.5 million, subject to approval from court.

THQ, which has cut staff and shut noncore businesses in an effort to revive its business, has studios in Austin, Texas, and Champaign, Illinois, as well as Canadian studios in Vancouver and Montreal.

Its studios and development teams will continue to operate during the sale process, the company said.

In a U.S. Securities and Exchange Commission filing last month, THQ said Wells Fargo warned the company on October 16 that it had borrowed beyond the limits of its loan terms.

THQ then made a $5.6 million payment on the $21 million that it had borrowed in the quarter ending September 30 in an attempt to regain compliance under its loan agreement. Wells Fargo then informed the company that it was in default under the terms of its credit facility, according to the filing.

The company announced late last month that Wells Fargo Capital Finance LLC had agreed to forgo action against the games publisher on any default on its $50 million credit facility until January 15, 2013.

Executives announced on a November 5 earnings call that they were postponing the release of several titles including its "South Park" game, increasing the company's need for capital.

The company also has $100 million in convertible notes that are due in August 2014.

THQ's market cap dropped about 72 percent to $2.7 million on Wednesday.

(Editing by Gerald E. McCormick, Tim Dobbyn and Matthew Lewis)




CoH2 "might" be delayed longer...

Edited by Chaos1907
Link to comment
Share on other sites

A new rumor suggests that Ubisoft is looking to buy the assets of troubled publisher THQ. According to MCV, anonymous sources suggest that Ubisoft is among the front-runners to bid for THQ’s assets, including brands and studios.


MCV’s sources suggest that Ubisoft is already participating in “lengthy discussions” regarding a deal but that it’s “after a bargain buy, and is prepared to hold-out until THQ is forced to sell off specific assets.”



Link to comment
Share on other sites

  • 3 weeks later...
According to Distressed Debt Investing, all parties have come to an agreement and THQ assets will be sold on January 22nd. The auction will allow for "title by title" sales of THQ's assets.




So CoH 2 will BE delayed.

Link to comment
Share on other sites

  • 3 weeks later...
  • SEGA has agreed to purchase Relic, developer of Company of Heroes 2 and Warhammer 40,000: Dawn of War.

  • Koch Media (owner of Dead Island publisher Deep Silver) has agreed to purchase Saints Row developer Volition as well as the publishing rights to the Metro franchise. (Update: According to a statement issued by Koch, "Deep Silver, Koch Media’s international publishing powerhouse, will lead all further development and marketing on the Saints Row and Metro franchises." The statement added that "Koch Media and Deep Silver will roll out future plans for each franchise in the coming months.")

  • Crytek, who is currently developing Homefront 2, has purchased the rights to the Homefront franchise.

  • Take-Two (parent company of 2K and Rockstar) has agreed to purchase Turtle Rock Studios’ project codenamed Evolve. (Update: While Take Two was initially rumored to have acquired Darksiders publisher Vigil, it has since been revealed that this isn't the case)




Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Create New...

Important Information

By using this site, you agree to our Terms of Use.