Vice Media is nearing a deal to be bought out of bankruptcy by senior lenders in a process that will wipe out existing shareholders including James Murdoch.
The Wall Street Journal reported on Friday that senior lenders led by the private equity firm Fortress Investment Group are close to agreeing a rescue deal for the global news publisher and TV company.
A source familiar with the situation confirmed the WSJ report, which put a valuation of $400m (£316m) on the business, although $300m-$350m is seen by some parties as a more realistic number.
Vice could file for Chapter 11 bankruptcy protection as soon as next week and run a court-supervised sale in which Fortress, the biggest senior lender to the business, will be in a strong position as a bidder. It is understood that Fortress is planning to retain Vice’s senior management including a role for the company’s co-founder Shane Smith, if it succeeds in buying the company.
However, a post-bankruptcy acquisition would wipe out investors including Murdoch, the son of the media tycoon Rupert Murdoch, and the private equity group TPG. James Murdoch invested in Vice in 2019 through his holding company, Lupa Systems.
The company, whose assets include Vice News, Motherboard, Refinery29 and Vice TV, was once valued at nearly $6bn thanks to its attraction to millennial audiences. Vice began as a punk magazine in Montreal nearly three decades ago and expanded into areas including news and film and TV production.
However, it failed to mount an enduring challenge to established media companies despite attracting significant investment from some of those same players, including Disney and 21st Century Fox. Last month another of the digital challengers, BuzzFeed, said it was shutting down its award-winning news department and would be making substantial redundancies across the company.
