UPDATE (1:00PST): Twitter user DDInvesting, who is present at the hearing, has confirmed that THQ will be auctioning off its intellectual properties and owned studios piecemeal on January 22nd.
This means that, contrary to the original Clearlake plan, THQ will not remain in one piece on the 23rd, and may exist only in name. With rumors of Electronic Arts and Warner Brothers interested in bidding, it is highly unlikely that Clearlake will buy back all of the company piece by piece in this new auction.
In summary this tumultuous tale, which started almost exactly a year ago, has finally come to a close. THQ as we know it is done. As far as the games go, we will have to wait until after the auction to see what games make it out alive but, with plenty of talent polishing up highly anticipated games for release this year, it’s a safe prediction that most of them will land on their feet. As far as what company’s name is on the box, who knows?
Original Story (10:00PST): This morning, Clearlake Capital announced that it is willing to hear bids for the rights to individual games and studios in THQ until January 15th.
Clearlake came out of hiding in December as the savior of the troubled THQ with a plan to pay $10 million towards their debt, and purchase the company wholesale for $60 million. This plan allowed games currently in production at THQ to continue. But it also wiped out all of the shareholders, and didn’t do much of anything to satisfy the creditors to which THQ still owes a large amount of money.
The other problem with this plan was that it originally only left a three week period (half of which included the Christmas and New Years holidays) for other bidders to show interest. The Clearlake offer was brought out as proof that someone was willing to bid on the struggling THQ, and set an implied $60 million starting price. But the timing of the announcement and the deal closing suggested that THQ just wanted a quick way out of trouble, rather than actually hear offers from other parties that would risk fracturing the company.
This prompted creditors to call for an extended bidding period, during which other interested parties besides Clearlake could bid on individual pieces of THQ and raise more than just the $60 million originally offered. This morning, Judge Mary Walrath extended the bidding period to January 15th, but still thinks that may not be enough time.
No bidders have officially stepped forward yet, but the lawyer for Warner Brothers Interactive has gone on record saying they are interested in making a bids, and representatives from EA have apparently been spending some time looking at THQ’s facilities.
So what does this mean overall? Until January 15th, everything with THQ is still up in the air. It could be that the deal with Clearlake holds and THQ goes about its business, or, THQ’s entire stable of IP will go running off in different directions around the industry. Stay tuned.