Monday, April 14, 2008

Blockbuster makes Circuit City bid


Go to Financial Times original
Blockbuster, the video rental chain, said on Monday that it was prepared to buy Circuit City, the troubled US electronics retailer with an all-cash offer in the range of $6 to $8 per share.

The video rental group made public a letter sent to Philip Schoonover, Circuit City’s chief executive, on February 17 by Jim Keyes, Blockbuster’s chairman and chief executive. It outlined the retailer’s proposals but said Circuit City had so far failed to provide the access needed for due diligence to allow Blockbuster to make a definitive proposal.

Circuit City said in a statement that its board was continuing to review the offer, which it said followed an earlier similar proposal. But the retailer, which operates over 680 large format stores in the US, raised questions about the financing of the proposed deal, which Blockbuster has said would include a rights offering.

“To date Blockbuster has been unable to satisfy Circuit City and its advisors that Blockbuster’s proposal could be financed,” the statement said.

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