Blockbuster Inc., which has been busy trying to fix its own movie-rental business, is making a hostile takeover bid of just over $1 billion for Circuit City Stores Inc. with dreams of creating a huge chain that would sell electronic gadgets and rent movies and games.
The offer is larger than Blockbuster’s entire stock market value, but Chief Executive James Keyes said he was confident his company can swing the deal and that the move has the support of one of his board members, financier Carl Icahn, who could help with financing.
Icahn, Blockbuster’s largest shareholder, did not return calls for comment.
Someone explain to Icahn that Circuit City and Best Buy are not the same chain.
The blind buying the blind … marvelous.
Reminds me of the local appliance store back in my hometown. This was in the early ’80 and they sold BetaMax tape players. In order to sell any of the players, they had to run their own Betamax movie rental service.
Carl Icahn is a multibillionaire, so a billion more or less won’t hurt his pocket.
Killing 2 birds with one stone????????
As if it wasn’t bad enough that the Superstores wiped the Mom&Pop retailers out. All the rental shops in my town disappeared when Blockbuster came along. And recently even Hollywood Video folded. Guess what? I stopped going to Blockbuster years ago. I rent from our Public Library at $2.50 a movie, for two nights. Half that on certain days of the week (two for one price). I’ve rarely missed out on a movie, that the library wouldn’t stock. And they’re not out to screw me with a phoney late charge, like Blockbusters was notorious for pulling.
But now, rather than improve the one thing it’s known for. Blockbusters’ owners would rather just swallow up another retail chain, like some kind of parasitic amoeba. So it can no doubt offer crappier service for a wider range of products. So… when does the next citizens’ revolution begin, and they start torching all these grand palaces of greed and corporate corruption?
Well, at least CC doesn’t suck as bad as Best Buy!
Is it just me or does this resemble the yahoo-AOL deal. #6 at least best buy got rid of rebates. Their service still sucks.
Well, BallBuster Video trails NetFlix, and CircuitCity trails BestBuy; so it would be a marriage of two LOSERS !!! Just what Retail needs, heading into a recession !!!
So what will they call it? Circuit Buster? It would be appropriate!
Instead of trying to excel in your own industry which you (theoretically) understand, you try to increase profit by buying a loser in an industry you don’t understand.
The stockholders of the bought company get the last laugh because their worthless company got them some return. If you can’t sell products at a profit – sell your company for a profit. It’s the American way.
Just make sure it doesn’t cost YOU anything, folks.
I’m excited for this.
I worked at Blockbuster for about 3.5 years a few years back and I’d tell those that I liked to not tie themselves with what would be a sinking ship. I told them about video on demand, netflix and ezDVD. I said their days were numbered.
I’ve enjoyed watching them fall as of late.
As far as Circuit City goes I had friends that worked there and told me of some pretty shady sounding commission arrangements and in law school CC came up a great deal for having imaginative lawyers drawing up their contracts.
I agree with the “2 birds, 1 stone” interpretation.