Video game maker THQ Inc said on Wednesday it filed for bankruptcy, and private investment firm Clearlake Capital Group has offered to buy its assets.
THQ has filed voluntary petitions under Chapter 11 in U.S. Bankruptcy Court for the District of Delaware to facilitate a sale of the assets of its operating business including its four studios and games in development.
Shares of THQ plummeted on the bankruptcy news. In late New York trading Wednesday, the stock was down 71 percent at 40 cents.
The Agoura Hills, California-based company said Clearlake was a "stalking horse bidder" or a potential buyer chosen from a pool of bidders to make the first bid.
This "allows other interested parties to come forward with competing bids," THQ said in a statement.
THQ's domestic business units have filed for bankruptcy. "The company's foreign operations, including Canada, are not included in the filings," THQ said.
Known for its wrestling and "Saints Row" games, THQ has been losing ground to larger rivals including Activision Blizzard Inc . The company's stockholders approved a 1-for-10 reverse share split of its common stock in late June to raise its stock price and avoid being delisted.
The struggling video game company also said it has commitments from Wells Fargo and Clearlake for financing of approximately $37.5 million, subject to approval from court.
THQ, which has cut staff and shut non-core businesses in an effort to revive its business, has two U.S. studios in Austin, Texas and Champaign, Illinois and two Canadian studios in Vancouver and Montreal.
Its studios and development teams will continue to operate during the sale process, the company said.
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