Blockbuster Abandons Its Circuit City Quest
This story was written by Rafat Ali.
In this year of non-deals and terminated deals, this is not a surprise, considering how foolish the bid was in the first place: Blockbuster (NYSE: BBI) has abandoned its offer to buy Circuit City Stores, after weeks of investor speculation on the deal's progress. Here's how BB CEO Jim Keyes explained it: "Based on market conditions and the completion of our initial due diligence process, we have determined that it is not in the best interest of Blockbuster's shareholders to proceed with an acquisition of Circuit City. 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. We will pursue this strategy through our Blockbuster stores as a way to diversify the business and better serve the entertainment retail segment." That means some other stores or retail brands could be considered as acquisition targets, it seems.
Meanwhile, CC says it will continue to explore strategic alternatives, and has sent out pointers that an active bidding process in in place. Blockbuster in April disclosed that it had offered to buy Circuit City in February for $6 to $8 a share, or up to $1.3 billion.
By Rafat Ali