Blockbuster Withdraws Circuit City Bid

DALLAS, July 2: DVD rental
giant Blockbuster has dropped its efforts to acquire Circuit City, after
initially making a $1.3-billion bid for the electronics retail chain in April.

"Based on market
conditions and the completion of our initial due diligence process, we have
determined that it is not in the best interest of Blockbuster's shareholders to
proceed with an acquisition of Circuit City," said Jim Keyes, Blockbuster’s
chairman and CEO. "We continue to believe in the strategic merits of a
consumer retail proposition that would bring media content and electronic
devices together under one brand. We will pursue this strategy through our
Blockbuster stores as a way to diversify the business and better serve the
entertainment retail segment."

At the time of the initial
offer, Blockbuster maintained that its combination with Circuit City would
result in an $18-billion global retail enterprise.

—By Mansha Daswani