Vice Media is coming close to completing a rescue led by senior lenders that will wipe out all existing shareholders, including James Murdoch.
The Wall Street Journal reported that senior lenders led by private equity firm Fortress Investment Group are close to agreeing a rescue deal for Vice.
A source familiar with the situation confirmed the WSJ‘s report, which also valued the company at US$400 million (AU$590 million). However, US$300-350 million (AU$440-$516 million) is seen by some as a more realistic amount.
Vice could file for Chapter 11 bankruptcy protection and run a court-supervised sale. This would put Fortress, the biggest lender to the business, in the driving seat.
It is understood that Fortress would retain Vice’s senior management, including co-founder Shane Smith, should it secure a deal.
A post-bankruptcy deal would also remove all other investors including Murdoch and private equity group TPG.
Vice had been valued at up to US$6 billion (almost AU$9 billion) in the past and went on a spree of acquisitions and diversifying ventures which ranged from launching its own TV channel, “Viceland,” to creating woman-focused brand Refinery29 to even releasing its own beer in the UK.
Regardless of whether a deal is struck for the floundering media company, a former staff has written that “the dream is dead.”
“The company will have to be a lot less bombastic in how it presents itself,” they wrote anonymously.
“At very best it will become another content aggregator in an already muddied landscape.”
They also wrote that while the London office where they worked was a “scintillating place” where “any idea could be realised,” the broader company had problems.
“There was a feeling that the corporate manoeuvres of the company were an embarrassment, and a horrifying vision of American megalomania,” they explained.
“There was a pervading fear that it would come to the exact same end that it is now. There were always whispers of inflated numbers, major brands pulling out of deals and bad behaviour. Occasionally I’d meet people from other companies who would gleefully say things like ‘how are they getting away with it?’
“A couple of times a year the Americans (who were actually Canadians) would come to London, book suites at the Ace Hotel, set up camp in the office, go for long lunches at Tramshed and conduct cringe-worthy all-company presentations – where founder Shane Smith or his consigliere Eddie Moretti would tell us how VICE was about to ‘become the millennial MTV,’ or ‘blow up the media game forever.'”
Lead image credit: Vice
