In this highly competitive world of retail, companies are buying each other out all the time. The news that Blockbuster wants to buy out Circuit City should come as no surprise, but it seems like an odd pairing.
The cash offer of between $6 and $8 a share was made Feb. 17. It is only now becoming public, according to Blockbuster, because the vidtailer wants Circuit City shareholders to have an adequate chance to weigh in.
Circuit City responded Monday by saying its board would “carefully consider and evaluate” the offer but added that “fundamental questions” remain, chiefly the matter of funding the $1 billion acquisition.
The American Circuit City bought out Radio Shack Canada was bought out by Circuit City (Now called the Source). Future Shop Canada was bought by Best Buy Canada, and the megachains are always merging to become bigger and better. Usually the bigger takes advantage of the competition while they face financial ruin, but they still scoop them up.
Can’t beat em? Join em. (or buy them)
But for Blockbuster to buy Circuit City is not even the same type of store. Of course they have their crossover traffic. Circuit City has a large movies and music section and Blockbuster sells the same (mostly movies). But the majority of Blockbuster’s revenue is to rent movies.
Imagine what Blockbuster City would look like. An electronics store that rents movies?