Blockbuster has offered to buy Circuit City Stores for as much as US$1.33 billion in a deal aimed at taking advantage of the global trend of putting media content on electronic devices, the U.S. movie rental giant said Monday.
Blockbuster has offered $6 to $8 per share in cash for Circuit City, depending on the results of a check of Circuit City"s books. The per share offer presents a huge markup from Circuit City"s closing stock price on Friday of $3.90, and values the company at between $990 million and $1.33 billion, based on the number of outstanding shares of stock Circuit City reported in its most recent quarterly earnings. Merging with Circuit City would create an $18 billion global retail company and substantially improve the financial performance of the two companies, Blockbuster said.