An auction of RadioShack is heating up fast, with big private-equity firms including Blackstone Group squaring off against at least one potential corporate acquirer, The Post has learned.
As reported exclusively by The Post, the Texas-based electronics chain has hired Goldman Sachs to explore strategic alternatives including a possible sale of the company that could fetch more than $3 billion.
An initial round of bids was completed last week, and Blackstone is a leading participant, according to sources familiar with the matter. Kohlberg Kravis Roberts & Co. is seen as a likely rival bidder, with private-equity shops Bain Capital and TPG also likely in the mix.
A RadioShack spokesman didn’t respond to a request for comment yesterday, and a Blackstone spokesman declined to comment.
Looking to reap a fat payout by selling RadioShack, CEO Julian Day has pressed Goldman Sachs bankers to pick up the pace of the auction, sources said. This week, Day and other RadioShack executives are slated to give presentations to bidders.
“RadioShack is an appealing opportunity for a (private-equity) firm because it has a ton of cash, and a mobile business that is growing quickly,” one banking source told The Post.
RadioShack’s retail rival Best Buy has kept an “extremely low profile” during the process, one banking source said, and it wasn’t immediately clear whether it is among the bidders.
Nevertheless, at least one so-called “strategic” bidder — possibly a competing retailer, and possibly Best Buy — is already participating in the auction, now that the first round of bids are in, according to one source close to the situation.
RadioShack, whose shares closed at $20.44 on Friday, earlier this year had been eyeing a takeout price north of $30, which would amount to well over $3.5 billion.
But with the European debt crisis hammering RadioShack shares and capping a potential premium from private-equity buyers, Day has signaled to buyers he’s willing to sell for less, sources said.
RadioShack, looking to complete a deal this summer, “likely will settle for a bid in the $20s-per-share range,” according to one source familiar with the sale process. “The question is how low in the $20s.”
The participation of Blackstone in the auction is striking, industry sources noted, as the buyout firm headed by Steve Schwarzman has made few investments in the retail industry. A notable exception is Michael’s Stores, a Texas-based arts-and-crafts chain that has paid off nicely for Blackstone, sources said.
Best Buy has repeatedly declined to comment on whether it’s interested in buying RadioShack. But the retailer could give its Best Buy Mobile chain a big growth spurt by acquiring RadioShack’s 4,475 US stores, some retail analysts said.