Radio Shack to be bought by Best Buy, others?

Electronics chain Radio Shack is looking into selling its operations, with the most likely party to purchase it being big-box retailer Best Buy. Sources indicate the sale could be worth as much as $2.7 billion. If Best Buy does acquire Radio Shack, it is likely to do so in order to sell more handheld devices, including e-book readers, mobile internet devices and smartphones, some bankers believe.

At the same time, Radio Shack could take its $900 million in cash to make a share buyback, or perhaps even make an acquisition of its own. Neither Radio Shack nor Best Buy commented on these reports, and even sources maintain any auction or bidding for Radio Shack is still weeks or months away.

The company has fared better than more generalized rivals like Circuit City but has struggled as its smaller stores and emphasis on lower-priced devices have reduced the selection it can provide compared to a "big-box" store like Best Buy. Radio Shack's recent push into phones has helped mitigate but not completely shrink the gap.

By Electronista Staff