Dish Network wins auction, acquiring Blockbuster for $228 million

New York City -- Satellite TV company Dish Network Corp. said Wednesday that it won the auction for Blockbuster with a bid valued at $228 million in cash. The transaction, expected to close the deal during the second quarter, needs bankruptcy court approval.

As of Tuesday, Dish, investor Carl Icahn and a group of debt holders were the three remaining bidders for the Dallas movie-rental chain, which filed for Chapter 11 in September.

Dish's bid was for $320 million, but the value decreases to $228 million after adjusting for available cash and inventory.

"Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for Dish Network," said Tom Cullen, executive VP sales, marketing and programming for Dish Network, in a statement.

Blockbuster had shuttered some 600 stores in recent months. It currently has about 2,400 locations, but plans to close about 700 more by mid-April.

There were several rounds of bidding at the U.S. Bankruptcy Court of New York on Tuesday before the courthouse closed for the day. The auction continued at law firm Cadwalader Wickersham & Taft, where the proceeding was closed to the public.