Blockbuster can start due diligence on Circuit City

Blockbuster can start due diligence on Circuit City

Summary: Circuit City said Friday that it is exploring strategic alternatives and will allow Blockbuster and investor Carl Icahn to "conduct additional due diligence."Last month, Blockbuster announced a rather perplexing plan to acquire Circuit City in an attempt to take two struggling retailers and make one strong one.

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Circuit City said Friday that it is exploring strategic alternatives and will allow Blockbuster and investor Carl Icahn to "conduct additional due diligence."

Last month, Blockbuster announced a rather perplexing plan to acquire Circuit City in an attempt to take two struggling retailers and make one strong one.

In a statement Circuit City said it has retained Goldman Sachs to explore strategic alternatives. Philip J. Schoonover, CEO of Circuit City, said:

"While the Circuit City board has confidence in the company's ability to successfully implement its turnaround plan and generate shareholder value, we believe that we can best serve the interests of our shareholders by exploring all possible alternatives to enhance shareholder value. Let me be clear that our decision to allow Blockbuster and Carl Icahn to conduct due diligence should not be taken as an indication that the board has completed its review of the Blockbuster proposal, that the board has taken a position on the company's value or that it has settled upon a particular strategic course of action."

I'll be really curious to see how this due diligence plays out. This proposed merger makes no sense to me.

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  • SM & CC, NF & BB

    Systemax is an better fit for Circuit City since Systemax already have an strong online store called TigerDirect. They also purchased most of CompUSA stores. It will be the most obvious and safest fit. Blockbuster will be better off merging with Netflix and rebranding the stores to Netflix since "Netflix" sound better and is extremely popular with today's consumer. If Blockbuster gets its way. Shareholders will suffer badly. Believe me, I predicted AOL buying Time Warner was going be an failure. It came true. I also prdicted Kmart buying Sears was going to be an failure. It came true. So I predict in two years this merger going to be an failure. The chemistry is not there for these 2 companies. (IT DOES NOT MAKE SENSE). At least Systemax has an strong presence in the consumer electronics market with strong credible brands that are extremely popular.
    1g2j