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$5 Billion Blockbuster Wants To Buy $12 Billion Circuit City

Written by Evan Schuman
April 14th, 2008

Blockbuster is trying to acquire Circuit City–a chain that is reporting twice its annual revenue–by offering a 50 percent per-share premium, Blockbuster announced early on April 14.

Blockbuster’s statement said it has been talking with Circuit City for months, but "Circuit City has failed to provide the due diligence necessary to allow Blockbuster to make a definitive proposal."

In a thinly veiled threat of a potential hostile takeover attempt, Blockbuster’s statement said "Blockbuster is making its proposal public because it believes the shareholders of Circuit City should have the opportunity to participate in determining the destiny of the company."

Circuit City is more than twice as large as Blockbuster. The company reported some $12 billion in revenue for its last full fiscal year, compared with the $5.5 billion reported by Blockbuster for its last full fiscal year. And both companies have been struggling with profits, with each reporting losses for last year.

Posted in IT Strategy/Industry
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One Comment | Read $5 Billion Blockbuster Wants To Buy $12 Billion Circuit City

  1. Bob Scheier Says:
    April 14th, 2008 at 4:28 pm

    Ths is one of those mergers between two struggling companies that is always so hard to understand. Circuit City seems to lack the clout or merchandising flair to compete with Best Buy (especially in a down retail market) and as for Blockbuster…well, when was the last time you rented a video? Circuit City is all about the hardware (TVs, cell phones, and other electronics) and BlockBuster is about the software (entertainment.) No mergers that tried to combine these two elements has worked well, to my knowledge.

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