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Blockbuster bids for Circuit City Blockbuster bids for Circuit City
(about 1 hour later)
Film rental firm Blockbuster has gone public with a bid to buy the US Circuit City store chain for $6 to $8 a share. Film rental firm Blockbuster has gone public with an all-cash bid to buy US firm Circuit City for $6 to $8 a share.
The firm said it sent a letter with the all-cash offer to Circuit City in February, but that the electronics firm had not yet performed due diligence. Blockbuster said it sent a letter with the offer to Circuit City in February, but that the electronics firm had not provided access to its books.
Blockbuster made its bid public saying shareholders "should have the chance to determine the destiny of the company". However, Circuit City said it was not convinced that Blockbuster - which faces tough rivalry from online film sites - had the means to back its bid.
The offer is significantly higher than Circuit City's closing share price of $3.90 before the weekend. The offer beats Circuit City's closing share price of $3.90 seen on Friday.
Circuit City said it was open to more talks, but was not prepared to embark on due diligence with the film rental chain.
Blockbuster said it asked for an answer from Circuit City by February 21, but is still waiting to see the electronic firm's accounts to let Blockbuster table a definitive takeover bid.
Blockbuster made its bid public on Monday saying shareholders "should have the chance to determine the destiny of the company".
A tie-up of the two firms would lead to an $18bn global retail company, according to Blockbuster.A tie-up of the two firms would lead to an $18bn global retail company, according to Blockbuster.