Blockbuster: Circuit City deal is off
What’s going to happen to Circuit City now? The national consumer electronics chain was headed into oblivion when Blockbuster offered to buy the company for $1.32 billion two months ago. On July 1, the DVD rental outlet pulled its deal off the table.
Blockbuster CEO Jim Keyes cited poor market conditions as a key cause of this decision. Initially the proposed buyout was greeted lukewarmly by investors and it took a while for Circuit City to complete the due diligence process.
Blockbuster will now look to expand their hardware sales offerings through their existing rental store fronts to expand their business. They propose sales of video games, DVD and Blu-ray movies, food, coffee and hardware such as Blu-ray players and game consoles. Blockbuster is also looking to get into the digital download arena with Netflix.
Circuit City’s CEO, Philip Schoonover, said they are looking to boost shareholder value in the company. However, Circuit City stocks did take a hit after the news came on Tuesday.