
Blockbuster Goes After Circuit City
Movie renter
Blockbuster
( BBI) has offered to acquire consumer-electronics seller
Circuit City
(CC) - Get Report
for at least $6 a share, but thus far the target company hasn't shown much interest.
Blockbuster said it detailed the proposal in a letter to Circuit City Chairman and Chief Executive Philip Schoonover on Feb. 17. To this point, Circuit City "has failed to provide due diligence necessary to allow Blockbuster to make a definitive proposal," Blockbuster said.
Therefore, Blockbuster decided to make its offer, which could go as high as $8 a share, known to the public. Shares of Circuit City were surging 56% to $6.09. Blockbuster was sinking nearly 14% to $2.70.
Wachovia Walloped, Blockbuster Baffles |
var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 1503291423; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8); |
Blockbuster's offer comes as both it and Circuit City are struggling to keep up with increasingly tough competition. Blockbuster now offers a movies-by-mail option, along with its traditional stores, in order to offset the impact of
Netflix
(NFLX) - Get Report
, while Circuit City has seen
Best Buy
(BBY) - Get Report
emerge as the option of choice for consumer electronics.
"Our proposal offers Circuit City a significant premium to its existing stock price and creates a game-changing retail concept with a sustainable competitive advantage," Blockbuster Chairman and CEO Jim Keyes said in a statement. "We believe the combination will result in a compelling consumer proposition that will drive significant revenue and margin enhancements, as well as cost synergies."
This article was written by a staff member of TheStreet.com.








