Blockbuster withdraws Circuit City offer

Blockbuster has announced that it has decided to withdraw its proposal to acquire Circuit City.

The 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 back in April.

But now it seems that Blockbuster has decided against pursuing the unsolicited offer - and says it will try the electronics and media business strategies within its own existing stores.

"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", said Jim Keyes, Blockbuster CEO.

"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."