Dallas (TX) – Blockbuster has publically disclosed a two-month old takeover offer for Circuit City. Back in February, Blockbuster sent a letter to Circuit City offering at least $6 a share which is more than 50% higher than Friday’s closing price of $3.90. Apparently Circuit City’s board hasn’t moved quickly enough and Blockbuster is now hoping the shareholders can put pressure on the board.
Blockbuster Chairman and CEO Jim Keyes sent a letter to Circuit City Chairman and Chief Executive Philip Schoovonver back in February 17. He offered to combine the companies and pay at least $6 per share of Circuit City stock. Of course mergers require due diligence like checking of the books and so far Circuit City has refused to let Blockbuster examine any financial information.
Keyes says the proposal offers Circuit City stockholders a significant premium to the existing stock price and creates a “game-changing retail concept”. It’s unclear how Blockbuster would change Circuit City’s money losing brick-and-mortar-based electronics business. Perhaps some weaker stores would be closed or portions of existing stores converted into Blockbuster outlets.