Updated from 4:14 a.m. EDT

NEW YORK ( TheStreet) -- Dish Network ( DISH) won a bankruptcy auction for Blockbuster ( BLOAQ.PK) with a winning bid valued at about $320 million.

After certain adjustments are made, Dish said Wednesday it expects to pay about $228 million in cash to acquire Blockbuster.

Closing of the deal is expected in the second quarter.

"With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for Dish Network," said Tom Cullen, Dish's executive vice president of sales, marketing and programming. " While Blockbuster's business faces significant challenges, we look forward to working with its employees to re-establish Blockbuster's brand as a leader in video entertainment."

Dish won the auction for the movie-rental chain early Wednesday morning.

The Wall Street Journal, citing people familiar with the matter, reported Blockbuster's creditors will receive about $178.8 million of Dish's bid, with the balance of the money going to expenses associated with the auction and Blockbuster's bankruptcy proceedings.

Dish has expressed interest in using some Blockbuster stores to sell subscriptions to its service, one of the people said, the newspaper reported. Dish also is interested in possible synergies from Blockbuster's on-demand business.

The bid from Dish, a satellite-TV provider, beat out offers from a group lthat included Carl Icahn, and a group of hedge funds led by Monarch Alternative Capital, the Journal reported.

Blockbuster filed for Chapter 11 in September.

-- Written by Joseph Woelfel

>To contact the writer of this article, click here: Joseph Woelfel

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