Blockbuster goes public with unsolicited bid for Circuit City
Blockbuster has announced it is to take an unsolicited $1 billion-plus bid for Circuit City Stores Inc. directly to the consumer electronics chain's shareholders, saying Circuit City has not responded to repeated offers.
The struggling movie rental company said it has been in talks with the struggling Circuit City for months regarding an acquisition offering $6 to $8 per share in cash for the company, a 25% to 67% premium on Circuit City's stock price.
"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 boss Jim Keyes said in a statement.
"We look forward to engaging in further conversations with Circuit City and reaching an agreement as soon as possible."
Circuit City is America's second biggest consumer electronics chain after Best Buy and the move has raised eyebrows in business circles with Blockbuster's apparent interest in "bricks and mortar" stores at odds with market trends, which are going more and more online.