(Reuters) - Troubled electronics retailer RadioShack Corp is preparing to shut down the chain in a bankruptcy deal that would see half the stores taken over by Sprint Corp, Bloomberg News reported, citing people with knowledge of the discussions.
The rest of the stores would close down, Bloomberg said on Monday. (bloom.bg/16aNrZw)
The New York Stock Exchange (NYSE), meanwhile, said its regulatory arm was acting to delist RadioShack shares, and would suspend their trading immediately. (bit.ly/1CrbPV5)
Sprint and RadioShack have had talks about co-branding the stores, Bloomberg reported, citing two anonymous sources.
Another bidder could yet emerge to buy RadioShack and continue operating the 94-year-old chain, Bloomberg said.
RadioShack declined to comment on the Bloomberg report and said it had not confirmed any of the information. Sprint declined to comment.
The Wall Street Journal reported on Sunday that Standard General, a hedge fund and the largest investor in RadioShack, was in talks to serve as the lead bidder at a bankruptcy auction.
On Monday, the NYSE said it started the delisting process as RadioShack did not intend to submit a business plan to address its non-compliance with the exchange’s listing standards.
RadioShack had received a warning from the NYSE last month — the second time in a year — that it had 45 days to come up with a business plan.
The exchange sends such a notification when companies listed on it fail to maintain an average market capitalization of $50 million over 30 consecutive days.
RadioShack warned last September that it faced bankruptcy if talks with lenders and stakeholders about a sale or a restructuring failed.
The electronics retailer was once the operator of go-to shops for innovators and engineers for products ranging from vacuum tube speakers to the first mass-produced PC.
But the company has failed to transform itself into a destination for mobile phone buyers, losing out to rivals such Amazon.com Inc and Wal-Mart Stores Inc.
RadioShack said in October that it would seek to convert a loan of $120 million, given by investors including Standard General and Litespeed Management LLC, into equity “in the coming months”.
RadioShack shares, which had touched a high of $79.50 in 1999 during the dotcom boom, closed down 13.3 percent at $0.24 on Monday.
Reporting by Ramkumar Iyer and Yashaswini Swamynathan in Bengaluru and Malathi Nayak in San Francisco; Editing by Joyjeet Das