THQ files for bankruptcy, Clearlake to bid for assets

Wed Dec 19, 2012 4:55pm EST
 

By Malathi Nayak

SAN FRANCISCO (Reuters) - Videogame maker THQ Inc said on Wednesday it filed for bankruptcy protection, and entered into an agreement with private investment firm Clearlake Capital Group for a potential sale of its assets, in a bid to tackle its financial troubles.

The assets to be sold include THQ's four studios and games in development. The filing was made in U.S. bankruptcy court in Delaware.

Shares of THQ, which were briefly halted before the announcement, plunged 74 percent to close at 36 cents on the Nasdaq on Wednesday.

"They're currently in default of one of their credit lines, so it's not a huge surprise," said Mike Hickey, analyst at National Alliance Capital Markets.

Product delays and poor-performing products in a videogame market that is struggling to reverse flagging sales "kind of circled in aggregate to lead to their demise," Hickey said.

The Agoura Hills, California-based company said Clearlake was a "stalking horse bidder" or a potential buyer chosen from a pool of bidders to make the first bid.

This "allows other interested parties to come forward with competing bids," THQ said in a statement.

Foreign operations, including Canada, are not part of the bankruptcy filing, the company said.   Continued...