RadioShack Corp. (NYSE: RSH) is reportedly in discussions with Sprint Corp. (NYSE: S) about a bankruptcy deal that would have Sprint acquire about half of RadioShack’s store leases. The rest of the RadioShack stores would close.
According to the report at Bloomberg, which cites people with “knowledge of the discussions,” the RadioShack name would disappear and the Sprint-operated stores would carry the Sprint name.
RadioShack stock has posted a new low of $0.22 on the report.
In October RadioShack received a $535 million loan from hedge fund Standard General and the fund would be the lead bidder in a bankruptcy filing and would provide debtor-in-possession financing after the filing.
Sprint, presumably, would expand its retail footprint by adding the current RadioShack leases.
In mid-January there was a report that RadioShack was in talks with a private-equity firm that would buy its assets out of bankruptcy. Selling some leases to Sprint and closing the rest of the stores is a lot simpler. The bankrupt company would not have to fight with lenders over control and Standard General might at least recover some of its costs of the loan.
Shareholders of course will get nothing, but that was likely anyway.
RadioShack stock traded at around $0.24 after posting its new low. The 52-week high is $2.79.