Blockbuster backs out of Circuit City offer
updated 10:50 pm EDT, Tue July 1, 2008
BBuster Withdraws C City
Video retailer Blockbuster tonight said it has withdrawn its offer to buy Circuit City. The company provides few details as to the reason for its sudden exit but says that a combination of "market conditions" and the process of due diligence, or examining the health of Circuit City as a business, have led it to believe that a takeover of the electronics chain is not in its best interests. Blockbuster still argues that the idea of unifying media and electronics under one name but that it will have to do so through its own stores rather than Circuit City's locations.
Circuit City has yet to comment on the matter.
The deal would have been worth $1 billion and is understood to have been a core component of a strategy to leave the traditional but rapidly failing physical movie rental business in favor of direct downloads or sideloading content to portable media players. Blockbuster is already known to be exploring the possibility of a networked media hub tied into its Movielink Internet service as well as in-store kiosks that would load rentals directly on to handhelds, bypassing a home computer altogether.
