Warner Brothers Interactive Entertainment put a $33 million bid on Midway Chicago and Midway Seattle, as reported by MCV. This agreement includes the Mortal Kombat property, but not the TNA fighting game series, or the Newcastle and San Diego offices.

The two companies have now entered a ’stalking horse’ agreement, which means a court-supervised auction process will attempt to set the highest price possible for the assets on the block. This prevents other bidders from swooping in with lowball offers and screwing over Midway’s shareholders.

This news comes as no surprise, as this deal was anticipated last month:

“Warner is pretty confident that they will get Midway – which will be an immediate boost to their portfolio," a source close to Warner is reportedly said. "The deal isn’t done yet. Midway is still open to offers from other potential buyers – but Warner looks to be favourite to wrap it up. They look ready to put the money on the table.”

This announcement follows months of increasingly degenerating business for the video game developer/publisher. After filing bankruptcy in February, several found the company’s incentives for establishing a sell-out deal distasteful. These incentives included withholding around $3.7 million from bankruptcy filings to pay key executives for general and specific bonuses for establishing deals to sell Midway properties Mortal Kombat and The Wheelman.

Negative public opinion caused the company to quickly change the benefits, removing any bonuses for selling Mortal Kombat and drastically reducing the general bonuses to be paid.

Midway’s departure from the video game scene has been anything but elegant. While it’s hard to see a company with the legacy of Midway on hard times, perhaps Warner Bros. Interactive Entertainment can helm Midway’s studios with more poise.