Warner Bros. Offers to Buy Most of MidwayS

Midway today announced that they have received a more than $33 million offer from Warner Bros. to buy out most of their company.

"It's in writing now, that there is interest," said Geoffrey Mogilner, director of corporate communications for Midway, who added that the company has been in talks with other potential owners as well.

The "stalking horse" asset purchase agreement with Warner Bros. Entertainment would include rights to Mortal Kombat and Midway's studios in Chicago and Seattle. The agreement would not include the studio in San Diego, Newcastle or the TNA wrestling franchise.

The Warner Bros. decision to not include the Newcastle or San Diego studios or the TNA rights was a decision the company made based on what they felt was best for their company, Mogilner said. Midway currently holds a multi-year, multi-game contract with TNA and are already working on the next title, Mogilner said.

The offer for Midway does include picking up the rights to Wheelman, which was developed in Newcastle.

The news comes months after we heard that Warner Bros. was one of three groups looking to buy the company. At the time we were told that Warner Bros., Ubisoft and a private Chicago investor were all looking to pick up Midway. Our sources told us Warner Bros. were at the top of the list with a vice president already touring Midway's headquarters.

Warner Bros' offer is for $33 million, subject to adjustment, plus the agreed value of Midway's U.S. account receivables. Something, Mogilner said, that would be calculated when and if the bid is approved.

Attorneys were meeting this morning to set up a hearing to discuss this initial bid, he said.

Prior to finalizing the deal, there will be a court-supervised auction process to handle any possible competing bids. That process, if approved by the court, would give other companies 30 days to make a bid, with the auction happening a few days after the bidding stops.

Warner Bros' offer "is an opening bid," Mogilner said. "We're going to kick off a process once the court approves this bid. We're expecting other potential investors to come in and make bids on portions, set of assets or the whole thing.

"We've been actively speaking with a number of interested parties and continue to do so."

The publisher of Mortal Kombat filed for bankruptcy in February. The filing kicked off a soap opera of allegations of back room dealings, and corporate waste.