Print 30 comment(s) - last by SecTech767.. on Jul 5 at 11:57 PM

After due diligence Blockbuster decides not to buy Circuit City

Traditional movie stores are feeling pressure from alternate forms of movie rentals. Rental chain Blockbuster has found competition from services like Netflix to be stiff. To combat the loss of customers to Netflix and similar services, Blockbuster launched its own web-based rental service.

Blockbuster has been looking intently for ways to improve the profitability of the company and has been offering movies for sale in its stores and special bundles of games and game consoles as a way to get customers into its retail stores.

In April 2008, Blockbuster made an offer to buy Circuit City at $6 to $8 per share, amounting to as much as $1.35 billion. At the time Blockbuster made its intention to pursue the purchase of Circuit City, it also noted that management of Circuit City had failed to provide Blockbuster with the due diligence it needed to make a definitive proposal to purchase the company.

In May of 2008, Circuit City finally opened its books to Blockbuster to allow it due diligence to make the decision to purchase or not. Today Blockbuster announced that it is withdrawing its proposal to purchase Circuit City.

"Based on market conditions and the completion of our initial due diligence process, we have determined that it is not in the best interest of Blockbuster's shareholders to proceed with an acquisition of Circuit City," said Jim Keyes, Blockbuster Chairman and CEO. "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 has not commented on the withdrawal of the proposed purchase at this time.

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Circuit City [STRS]
By Cheapshot on 7/2/2008 12:18:48 PM , Rating: 3
Another business collapse due to a false aquisition attempt.

I imagine many will pull out from mere speculation.


RE: Circuit City [STRS]
By tuteja1986 on 7/2/08, Rating: 0
RE: Circuit City [STRS]
By FITCamaro on 7/2/2008 12:44:01 PM , Rating: 1
Blockbuster and Circuit City don't compete....

RE: Circuit City [STRS]
By KaiserCSS on 7/2/2008 12:49:12 PM , Rating: 2
Block Buster sells electronics now?

Huh, didn't know that. Guess I'll be able to pick up that 42-incher AND Kung-Fu Panda all in one shot now!

RE: Circuit City [STRS]
By Hiawa23 on 7/2/2008 1:04:10 PM , Rating: 2
Thanks To Netflix, I have not even step foot in a Blockbuster in 4plus years. Didn't even know they sold electronics. The way the economy is looking & as bad as CC is doing, looks like a good move by Blockbuster.

RE: Circuit City [STRS]
By RabidDog on 7/2/08, Rating: 0
RE: Circuit City [STRS]
By FITCamaro on 7/2/2008 2:00:34 PM , Rating: 2
So you're comparing pirating to a legitimate business?

RE: Circuit City [STRS]
By RabidDog on 7/2/08, Rating: 0
RE: Circuit City [STRS]
By kattanna on 7/2/2008 2:23:16 PM , Rating: 2
its always amazing to see all the ways that thieves justify themselves in stealing from others.

what would be even funnier is if they suddenly then themselves actually produced something that others stole and see what they think about it.

RE: Circuit City [STRS]
By RabidDog on 7/2/08, Rating: 0
RE: Circuit City [STRS]
By Spivonious on 7/2/2008 3:27:12 PM , Rating: 2
It costs $10 to rent a movie?

RE: Circuit City [STRS]
By RabidDog on 7/2/2008 3:45:17 PM , Rating: 1
In the theater it costs $10.

RE: Circuit City [STRS]
By Spivonious on 7/2/2008 4:22:00 PM , Rating: 2
What does that have to do with Blockbuster or Netflix?

RE: Circuit City [STRS]
By SecTech767 on 7/5/2008 11:57:42 PM , Rating: 2
If these people are to cheap to contribute to socity by acutally buying what other people worked very hard for then let them be. They should all get together and play "Lets go eat whats under the sink".

Honestly guys, pay the 10 bucks and feel good about it you cheap bastards.

RE: Circuit City [STRS]
By Darkefire on 7/2/2008 2:20:56 PM , Rating: 2
Name me five people that don't make copies of every film they get from Netflix and I'll give you a cookie. With what you pay for it, Netflix is pirating without the guilt.

RE: Circuit City [STRS]
By kattanna on 7/2/2008 2:27:11 PM , Rating: 3
With what you pay for it

you make it sound like netflix is super expensive, which it isnt.

if netflix is such a financial burden to you, then maybe you should be spending that time you spend copying movies and instead getting an education where you can then get a job good enough to afford such a luxury, which it is.

entertainment is a LUXURY items.. not some god given right simply because your a lazy american who feels its their right.

RE: Circuit City [STRS]
By Scott66 on 7/2/2008 9:06:12 PM , Rating: 2

RE: Circuit City [STRS]
By Spivonious on 7/2/2008 3:24:40 PM , Rating: 2
Well, let's see, there's me and my wife, my friend and his wife, my sister and brother-in-law....that's 3 customers...I don't know five people that use Netflix.

I do know that copying movies is illegal, and that I don't enjoy doing illegal things.

RE: Circuit City [STRS]
By RabidDog on 7/2/2008 3:40:05 PM , Rating: 1
Doing illegal things ROCKS! It's the only way to live, I'm smoking a joint right now, while copying a DVD, and downloading some MP3s!

RE: Circuit City [STRS]
By cleco on 7/2/2008 4:00:52 PM , Rating: 2
I heard black tar heroin is better.. you should try it

RE: Circuit City [STRS]
By The0ne on 7/2/2008 7:16:05 PM , Rating: 2
and Riding a motorcycle at high speed with no protection doing tricks. That's very fun you know. Had a coworker showed us his femur sticking out of his leg one time. Awesome. Give it a try and post pics...IF you can! Did I mention it's illegal..yep, your cup of tea...go now!!!

RE: Circuit City [STRS]
By ZmaxDP on 7/2/2008 7:21:39 PM , Rating: 2
Removes people like him from the gene pool faster too. I'm all for this proposed switch. For that matter, go find an actual rabid dog and get bitten. Avoid the treatment and you'll be gone real fast! Thought: We should make rabid dogs illegal (temporarily) and this guy will probably get one just to prove a point...

RE: Circuit City [STRS]
By ZmaxDP on 7/2/2008 7:29:25 PM , Rating: 2
Add me too - though I use blockbuster not netflix. I kind of like having the convenience to go to the store if we pick out a dud online and exchange it for something decent, or if we get a broken disk in the mail, you get the picture. But, we don't pirate them.

So, where's my cookie? I prefer chocolate chunk cookies if you don't mind. Here's a link:
Though, for privacy purposes I'd prefer you send a digital gift card to my e-mail that I've got listed on my profile here. Unfortunately, they only come in packs of 8. I'd happily share 6 with Spivonious since he named 6 people and thus deserves 6 cookies. I'll consider the last extra cookie a finders fee, ok? (By the way, you can't pirate cookies so don't try...)

Now, I'm all for making copies of movies, music, and other items I've legally purchased as I feel strongly that I'm protected by the fair use laws. I know the RIAA and probably the MPAA are trying to kill those rights, but hopefully they won't succeed because if they do I'll start doing something illegal after all...

RE: Circuit City [STRS]
By kmmatney on 7/2/2008 2:02:46 PM , Rating: 2
It's redbox for me - very convenient (most of the time) and cheap.

RE: Circuit City [STRS]
By JustTom on 7/3/2008 12:29:34 AM , Rating: 2
No, but Circuit City sells movies and video games.

Blockbuster, I hope you die
By Polynikes on 7/2/2008 1:00:21 PM , Rating: 2
Blockbuster's new "no late fees" thing is a crock. I rented a movie for a one day rental and returned it the next day and they later said I owed them $1.07. My guess is the lazy-ass staff didn't empty the damn return box out that day. I doubt it fills up nearly as fast as it used to.

Every time they ask me if I want to give them a new credit card number to put on my account (the old one has long since expired) I say "Nope."

RE: Blockbuster, I hope you die
By Spivonious on 7/2/2008 3:26:29 PM , Rating: 2
What you say doesn't make sense, unless they didn't empty the box for two weeks after you returned it, which is impossible, because the box would explode if unemptied after one weekend.

And it's not exactly new; they've had the no late fees since 2005.

RE: Blockbuster, I hope you die
By Siki on 7/5/2008 2:51:09 AM , Rating: 2
They tried to bill our account over $40 for a late return fee saying we "never returned it". However, after a quick check by an employee, they discovered the movie on their rack. Thanks I'll stick with Netflix.

A simple explanation really...
By MrBlastman on 7/2/2008 12:19:24 PM , Rating: 3
Circuit City's shares have fallen from 5.00/share to 2.16/share.

Blockbuster's shares have fallen from around 3.00/share to 2.76/share (basically stairstepping down)...

Circuits Mkt cap is 430 mil, Blockbuster's is 460 mil.

The numbers just don't compute! It doesn't make financial sense anymore.

Circuit Buster...
By GhandiInstinct on 7/2/2008 12:11:56 PM , Rating: 2
Strikes again!!!


"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation

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