RICHMOND, Va.–Circuit City Stores has received an unsolicited offer to be acquired by Blockbuster for at least $6 per share in cash, or more than $1 billion.
The Circuit City board of directors will weigh the movie-rental company’s unsolicited proposal, but “will take no action at this time,” Circuit City said in a statement.
Circuit City earlier reviewed a similar private proposal from Blockbuster.
Circuit City and its financial advisers have been exchanging information regarding the proposal, “but to date Blockbuster has been unable to satisfy Circuit City and its advisers that Blockbuster’s proposal could be financed,” the statement said.
Among the questions Circuit City has regarding the deal are whether the proposed acquisition would require a refinancing of the existing Blockbuster debt, and if so, what the terms and structure of any new debt would be; how large a rights offering would be required to fund the transaction; and what steps Blockbuster has taken to “provide a backstop to ensure successful execution of the rights offering contemplated,” the statement said.
