Blockbuster

( BBI) on Wednesday withdrew its $XX bid for

Circuit City

(CC) - Get Report

, citing "market conditions."

The video rental chain in April said it had two months earlier offered to acquire Circuit City for at least $6 a share, but the electronics chain showed no interest. Circuit City later opened its book to Blockbuster, but after the completion of initial due diligence, the video chain said it was dropping the effort.

"We continue to believe in the strategic merits of a consumer retail proposition that would bring media content and electronic devices together under one brand," Blockbuster Chairman and CEO Jim Keyes said in a company statement. "We will pursue this strategy through our Blockbuster stores as a way to diversify the business and better serve the entertainment retail segment."

Circuit City called its strategic review "an active and ongoing process."

"The board's review was not dependent on Blockbuster's participation," Chairman, President and CEO Philip Schoonover said in a company statement. "We are diligently working with the parties involved in the process, and intend to continue our thorough approach until such point as the board determines upon a particular strategic course of action."

The board does not have a deadline for completing the review, Schoonover said.

Billionaire activist investor Carl Icahn, who also was reviewing Circuit City's books, in May said he was prepared

to step in and buy the chain himself

, should Blockbuster's bid falter.

Many have questioned the value of a merger between the two struggling companies. Blockbuster faces significant competition from movie rental-by-mail company

Netflix

(NFLX) - Get Report

, while Circuit City has seen

Best Buy

(BBY) - Get Report

continue to dominate in consumer electronics sales.

Blockbuster shares jumped 17.9% to $2.96 in recent premarket action.

This article was written by a staff member of TheStreet.com.