A group of buyers including Fortress Investment Group is set to take over Vice Media after offering $225 million for the bankrupt company, the New York Times reported on Thursday, citing people familiar with the matter.
While multiple bidders were in the fray for Vice, only Fortress' bid was deemed "qualified", the report said.
An auction scheduled for Thursday has been canceled and a hearing to approve the sale of the company was scheduled for Friday, according to a filing with the U.S. bankruptcy court in Manhattan.
The hearing will review the stalking horse bid, which sets a benchmark price for an eventual sale, after Vice received no qualified bids, the filing said, without mentioning the names of the bidders.
GoDigital Media told Reuters in an emailed statement that it made a higher bid for Vice but the offer was turned down by the sellers.
"We think Fortress's decision is the wrong choice, and the company, employees, partners, and consumers will suffer."
Popular with millennial audience through its websites Vice and Motherboard, Vice Media filed for bankruptcy protection last month in a move that capped years of financial difficulties and top-executive departures.
Vice said at the time that its lenders including Fortress, Soros Fund Management and Monroe Capital will provide about $225 million in credit bid for almost all of its assets and also assume liabilities.
Privately held Vice was valued at $5.7 billion at its peak in 2017. Its investors include James Murdoch's Lupa Systems, TPG, Technology Crossover Ventures and Antenna Group.
Internet media publications have lately struggled to grow their ad-dependent revenue as Big Tech platforms like Facebook, Instagram and Google attracted the bulk of digital advertising spends.
Meanwhile, the ad market had been suppressed due to the COVID-19 pandemic, further challenging the business at online publishers.
Fortress and Vice did not immediately respond to Reuters requests for comment on the potential deal, which must be approved by the bankruptcy judge.
(Reporting by Yuvraj Malik in Bengaluru, additional reporting by Jonathan Stempel and Dietrich Knauth in New York; Editing by Shailesh Kuber)