[ # ] Blockbuster Makes $1 Billion Offer for Circuit City
/* Posted April 14th, 2008 at 12:03pm *//* Filed under News */
Yes you read that right. In other Blockbuster news, Blockbuster announced this morning its intent to buy Circuit City for $6-$8 per share which amounts to over $1 billion. Discussions for the buyout started some time last December but were made public today in a letter from the Blockbuster CEO Jim Keyes to Circuit City CEO Philip Schoonover.
A buyout of Circuit City would be a strategic alliance for both ailing companies. Circuity City itself posted a $200 million loss last year while Blockbuster struggles to make itself relevant in an age where digital media and online business are king. Blockbuster says the offer is intended to “capitalize on the growing convergence of media content and electronic devices.” Keyes states,
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. We believe the combination will result in a compelling consumer proposition that will drive significant revenue and margin enhancements as well as cost synergies.
Circuit City is still considering the offer. Should they accept, the businesses combined would add up to be a $18 billion business.
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