Blockbuster makes $1B bid for Circuit City; wants to sell portable media devices, content for them
Monday, April 14, 2008 - 09:32 AM EST "Blockbuster Inc. said Monday it will take an unsolicited $1 billion-plus bid for Circuit City Stores Inc. directly to shareholders of the nation's second biggest consumer electronics chain, saying Circuit City has not responded to repeated offers," David Koenig reports for The Associated Press."Blockbuster Chief Executive James Keyes said a deal would create a chain that could sell portable devices and entertainment for them, much like Apple Inc.'s stores," Koenig reports. "Keyes said the offer is supported by Blockbuster board member Carl Icahn, who could be a source of financing for the deal."
"Blockbuster, the movie rental chain operator, said it has been in talks with the struggling Circuit City for months regarding an acquisition, and sent a letter Feb. 17 to Circuit City Chairman and Chief Executive Philip Schoonover offering $6 to $8 per share in cash for the company," Koenig reports.
"Based on Circuit City's 168.4 million shares outstanding at Dec. 31, 2007, the deal values Circuit City at $1.01 billion to $1.35 billion. The offer also represents a 25 percent to 67 percent premium to Circuit City's closing stock price of $4.79 on Feb. 15, the last trading day before Blockbuster made its offer, and at least a 54 percent premium to the stock's closing stock price Friday of $3.90," Koenig reports.
"Circuit City is the nation's No. 2 consumer electronics chain after Best Buy Inc.," Koenig reports. "Circuit City lost the crown of No. 1 American consumer electronics chain to Best Buy in the 1990s as Best Buy built bigger stores in better locations and achieved greater economies of scale."
Full article here.
MacDailyNews Take: Perhaps if Circuit City sold profitable and strong-selling Apple Macs, they wouldn't be quite so beleaguered. That said, Blockbuster is already nicely beleaguered themselves, so this would be a marriage made in beleaguered heaven. Blockbuster's management is obviously delusional and severely out-of-touch. This has "failure" written all over it in flashing neon lights. Come on, guys, this is easy: two wrongs do not make a right.

"Come on, guys, this is easy, two wrongs do not make a right."
But three lefts do.