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Blockbuster ends Circuit City bid Blockbuster ends Circuit City bid
(about 4 hours later)
Film rental firm Blockbuster has withdrawn its offer to buy US electronics firm Circuit City, citing difficult market conditions. Film rental firm Blockbuster has withdrawn its offer to buy US electronics chain Circuit City, citing difficult market conditions.
Blockbuster said the bid, which valued the retailer at more than $1bn (£500m), was no longer in its best interests.Blockbuster said the bid, which valued the retailer at more than $1bn (£500m), was no longer in its best interests.
Last month, Circuit City said its sales had fallen by 11% in the three months to the end of May.Last month, Circuit City said its sales had fallen by 11% in the three months to the end of May.
Blockbuster had planned to create a chain selling portable devices as well as entertainment to be played on them.Blockbuster had planned to create a chain selling portable devices as well as entertainment to be played on them.
Despite withdrawing its offer, the firm's chief executive said it still believed in that strategy.Despite withdrawing its offer, the firm's chief executive said it still believed in that strategy.
"We will pursue this strategy through our Blockbuster stores as a way to diversify the business and better serve the entertainment retail segment," said Blockbuster's James Keyes."We will pursue this strategy through our Blockbuster stores as a way to diversify the business and better serve the entertainment retail segment," said Blockbuster's James Keyes.
Blockbuster faces increasing competition from firms offering films to download or rent by post.Blockbuster faces increasing competition from firms offering films to download or rent by post.
However, it recently announced that revenues in the US, excluding new stores, had risen 2.9% in the first three months of the year, compared with the same period twelve months earlier.However, it recently announced that revenues in the US, excluding new stores, had risen 2.9% in the first three months of the year, compared with the same period twelve months earlier.
This was the first rise in five years, the company said, partly as a result of cutting prices.This was the first rise in five years, the company said, partly as a result of cutting prices.