The Channel logo

News

By | Drew Cullen 9th May 2008 22:48

Circuit City runs up the white flag

Of course you can look at our books, Mr. Corporate Raider, sir

Circuit City's days as an independent are numbered. The ailing US electronics retailer last month received an unsolicited bid from Blockbuster, the ailing video store operator.

It was less than whelmed by the approach. But the company capitulated today when presented with Blockbuster's secret weapon: a letter from corporate raider Carl Icahn.

Icahn is a major shareholder and director in Blockbuster, and he says he will buy Circuit City himself if Blockbuster proves unable to raise financing or obtain shareholder approval for the transaction. Icahn is the world's forty-second richest man, with a net worth of $13bn. So no credit crunch there. But he wants some due diligence dalliance with Circuit City before dipping into his back pocket.

So Circuit City has duly opened its books to Blockbuster and Icahn. It says this should "not be taken as an indication that the board has completed its review of the Blockbuster proposal, that the board has taken a position on the company's value or that it has settled upon a particular strategic course of action." Gwana Gwana.

OK, so they are only at second base. And co-operation now means the avoidance of class action suits later. But Circuit City today also hired Goldman Sachs to seek "strategic alternatives to enhance shareholder value". This is code for "someone, buy us, but preferably not Blockbuster, PLEASE".

More from Circuit City here. ®

comment icon Read 5 comments on this article alert Send corrections

Opinion

Baby looks taken aback/shocked/affronted. Photo by Shutterstock

Kat Hall

Plans for 2 million FTTP connections in next four years 'not enough'
Microsoft CEO Satya Nadella
Stranded_ships

Chris Mellor

Thousands of layoffs announced as spinning rust enters its death spiral

Features

STRASBOURG, JUNE 29, 2016: The seat of the European Parliament. by Marco Aprile for shutterstock. EDITORIAL USE ONLY
Plan b, image via Shutterstock
EU workers, new markets: post-Brexit pressure on May & Co
Tough question, pic via Shutterstock
Honest mistake with your licensing? Audit police look at it on a 'case by case basis'