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RIM chief bids for NHL's Coyotes
Wed May 6, 2009 2:18am EDT
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By Alexei Oreskovic and Phil Wahba
SAN FRANCISCO (Reuters) - Jim Balsillie, the co-chief executive of Canadian smartphone maker Research in Motion, is trying to import a professional hockey team to Canada for the third time in move that looks likely to put him on a collision course with the National Hockey League.
Balsillie made a $212.5 million offer to buy the National Hockey League's Phoenix Coyotes on Tuesday, following the team's unexpected bankruptcy filing, which was announced by the team's owner.
The offer is conditional on the team relocating to Southern Ontario, according to a statement by Balsillie.
But the NHL appeared to be taken by surprise by the Coyotes filing, and has moved to block its owner from acting on behalf of the team.
"We have just become aware of today's Bankruptcy Court filing purportedly made on behalf of the Phoenix Coyotes. We are investigating the circumstances surrounding the petition, including the propriety of its filing," said National Hockey League Deputy Commissioner Bill Daly in a statement posted on the league's web site.
The league has suspended the Coyotes' owner, Jerry Moyes, barring him from having any authority over the club or acting on its behalf.
Balsillie's offer consists of $80 million to investment fund SOF Investments, $35 million to the NHL, and $97.5 million to unsecured creditors.
Balsillie also agreed to post "debtor-in-possession" bankruptcy financing of $17 million. DIP funding allows a bankrupt company to continue operating while it reorganizes.
In the statement, Balsillie said the current team ownership asked he "table" an offer to buy the Coyotes, and that significant discussions resulted in an offer that is in the best interests of the franchise, the National Hockey League, and Canadian hockey fans.
Balsillie is co-CEO of Waterloo, Ontario-based Research in Motion Limited, which makes the popular BlackBerry smartphone, a rival to the Apple Inc iPhone.
The Phoenix Coyotes filed for Chapter 11 bankruptcy protection in federal bankruptcy court in Arizona on Tuesday, according to a separate statement from the team's owner Dewey Ranch Hockey.
The bankruptcy filing included a proposed sale of the franchise to Balsillie's PSE Sports & Entertainment, the team said.
The deal is subject to approval by the bankruptcy court, which is expected to hold a hearing within several days to establish a sales procedure that could attract higher bids, according to a statement by Coyotes Hockey.
Overbids must exceed the Balsillie bid by $5 million and be fully funded at closing without a financial contingency, according to the deal's terms.
"The process assures that the identities of the new owner and the team's location will be known by June 30, thus enabling the NHL to include the team in its 2009-10 schedule," the Coyotes' statement said. Continued...
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