The Channel logo

News

By | Christopher Williams 14th April 2008 13:16

Blockbuster bids for Circuit City

Struggler + struggler = ?

Struggling retail chain Blockbuster has offered more than $1bn for struggling retail chain Circuit City. The video rental outfit made the bid public today in an attempt to hurry a deal along.

Blockbuster said it wrote to the Circuit City board on 17 February, but has not received the information it requested:

"Unfortunately, to date, Circuit City has failed to provide due diligence necessary to allow Blockbuster to make a definitive proposal. Blockbuster is making its proposal public because it believes the shareholders of Circuit City should have the opportunity to participate in determining the destiny of the company."

It said the offer is time-limited, but did not give a deadline. Blockbuster thinks Circuit City will enable it to build a hardware-content empire for video, after Apple's iPod-iTunes cash cow. Both firms have so far responded poorly to the challenges posed by internet retailers.

Last week, rumours flew that Blockbuster will soon announce its own set-top box.

The bid rates Circuit City at between $6 and $8 per share, an up to 67 per cent premium on its 15 February closing price. The combined company would be valued at $18bn.

The Blockbuster press release is here. Circuit City shares soared more than 50 per cent in pre-market trading today. ®

comment icon Read 15 comments on this article alert Send corrections

Opinion

frustration_anger_irritation_annoyance pain

Felipe Costa

Pressure to perform for stock market bearing down on disties
Columns of coins in the cloud

Michael Cote

Anything that simple to use has got to be complex to set up
Internet of Things

Gavin Clarke

This time, Larry's Oracle is going after the networking giants

Features

No email? No CRM? No Daily Mail iPad edition? You need a plan
Sinofsky's hybrid strategy looks dafter than ever
Failure to crack next-gen semiconductors threatens to set back humanity
SMEs get lip service - what they need is dinner at the Club