Blockbuster calls off Circuity City merger deal
Back in April Blockbuster announced that in February of this year they made an unsolicited bid to attempt to acquire Circuit City.
Just a quick reminder: Blockbuster had a vision of a “new” Blockbuster sees a combined Blockbuster and Circuit City would “result in an $18 billion retail enterprise uniquely positioned for the convergence of media content and electronic devices. We would seek to differentiate products in both Blockbuster and Circuit City stores by offering exclusive content and content-enabled devices. Both companies would benefit from complementary products, marketing, management strengths, technology and distribution and the resulting synergies would significantly improve consolidated financial performance.”
After no news for a bit, Blockbuster has announced today that they have pulled their offer, though they still believe that combing media and electronics is a good idea.
Blockbuster CEO Jim Keyes says, “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”
“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.”
I used to have three Blockbuster locations within ten minutes of home and now I think I have one…if that’s even still there (haven’t been in at least a year).
It’s nice they’re not giving up, but will they really be able to compete as a brick and mortar video and electronics store?
Their video rental business has been heading downhill for a while and Best Buy is pretty dominant in the electronics area, so the idea of Blockbuster trying to compete in this space without a time machine to bring them back 10 – 15 years sounds like a bad one to me.
Check out the full press release here if you’re interested.