Blockbuster comes to its senses: Pulls Circuit City bid

Blockbuster said it is withdrawing its proposal to buy Circuit City.

In a statement late Tuesday, Blockbuster said its decision to pull its bid was based on "market conditions and the completion of our initial due diligence process." What Blockbuster didn't say is that no one could figure out this deal in the first place despite some pretty PowerPoint slides.

Blockbuster, however, noted it was hanging on to its retail dreams. In a statement, Blockbuster CEO Jim Keyes said:

"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."

Circuit City said it will continue to explore strategic alternatives.