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Radio Shack's Soft Auction for a Possible Sale

After weeks of speculation and a stock price that keeps heading north, I can tell you that Radio Shack is currently conducting a so called soft auction for its sale.

RadioShack
RadioShack

But participants in that auction tell me, in recent days, it has slowed. And while there was significant interest from private equity (PE) initially, that interest is now being described as more modest, though bankers tell me a few sponsors continue to work on a deal.

Any buyout of Radio Shack—at this point it appears the interest is from PE—would require at least a billion dollar equity check.

That is not necessarily a bad thing from the perspective of the private equity firms, who are desperate to put cash to work and are finding few high quality assets in which to do so. Financing for such a deal is viable.

The asking price from Radio Shack is said to be high, according to one sponsor. A banker close to the deal tells me while a deal could still happen, nothing is imminent.

Radio Shack has declined to comment.

While private equity is looking at anything that's for sale these days, the real action may be in exits from previous deals. There are at least 15 sponsor related IPOs (initial public offerings)stacked up and waiting for pricing if the market's current stability continues.

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