Two bids from investor groups pitting Apple and Google against each other “far below” expected $2.6 billion (€2.1 billion), but could rise.
Wall Street Journal reports that opening bids for Kodak’s digital patents purportedly came in at “around $150 million (€120.8 million) to $250 million (€201 million)” – significantly below the $2.6 billion expected by Kodak, suggesting that the company may struggle to emerge from Chapter 11 after paying off creditors.
The two bids received by Kodak came from investor groups pitting Apple Inc. and Google Inc. in competition with each other for the 1,100 patents, which are due to be auctioned on 8 August, with the winner being announced on 13 August. While the bids are significantly lower than expected, the article reports that “those initial bids could rise quickly” should the two companies compete to win the patents from each other.
According to the article, it is rumoured that a winning offer of over $600 million (€483.2 million) would be viewed as successful and that “bidders don’t expect to pay much more than that”, despite a Kodak lawyer stating at a bankruptcy court hearing in January that the patents were believed to be worth “$2.2 billion (€1.7 billion) to $2.6 billion”.
It is expected that Kodak will use proceeds from the auction of its patents to repay banks such as Citigroup, which provided the company with a bankruptcy loan of $950 million (€765 million), of which Kodak has drawn $700 million (€563 million). Any further proceeds would be shared between “so-called second-line bondholders and the company”.
Preliminary bids for the patent portfolio were submitted on 30 July, with details of the auction and potential bidders being kept strictly confidential.
The Recycler also recently reported on a number of disputes between Kodak and Apple regarding patent infringement and ownership, with both companies winning and losing appeals.