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No rival bids emerge in deal to sell Kodak Gallery to Shutterfly

By SMRITI JACOB - 4/25/2012 4:05:15 PM

Eastman Kodak Co. and Shutterfly Inc. Wednesday said there were no competing bids to Shutterfly’s $23.8 million stalking horse proposal to buy some assets of Kodak’s Kodak Gallery.

Upon final approval by the bankruptcy court, the parties will aim to promptly close the deal, officials said. After the closing, Shutterfly will work with Kodak to transfer the Rochester company’s online photo services’ U.S. and Canadian customers and images onto the Shutterfly platform. Kodak Gallery has more than 75 million users.

“Our acquisition of Kodak Gallery is a perfect example of the consolidation that we believe will play an important role in helping Shutterfly solidify our leadership position in the social expression and personal publishing category,” said Jeffrey Housenbold, president and CEO of Shutterfly, in a statement.

“Moving forward,” he added, “we will continue to expand our market position through organic growth and disciplined acquisitions that leverage our scale and scope economies, vertical integration, solid balance sheet and profitable business model.”

Shutterfly shares (NASDAQ: SFLY) today rose more than 5 percent to around $30.60. Kodak’s stock was up nearly 3 cents in late-afternoon trading to 29 cents a share.

The deal, announced early last month, calls for Kodak to seek U.S. Bankruptcy Court approval of sale and auction procedures. Kodak filed for Chapter 11 bankruptcy on Jan. 19.

A hearing seeking approval for Shutterfly’s stalking horse bid will be held April 30 in the U.S. Bankruptcy Court for the Southern District of New York, documents filed with the bankruptcy court today show. Shutterfly expects to discuss the transaction as part of its first-quarter report the same day.

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