Blockbuster has offered $ 6 lower limit per share to buy out Circuit City , with the intent of creating a $ 18 billion global retail enterprise . you may almost see the power point of mixing culture medium and equipment retail , but is this actually a upright move for two company face a not - so - bright future ? say more in the Blockbuster press release after the startle . [ PCWorld ]
February 17 , 2008
Mr. Philip J. Schoonover
Chairman , President , and Chief Executive Officer
Circuit City Stores , Inc.
9950 Mayland Drive
Richmond , VA 23233
beloved Phil :
Since early December , we have had a bit of conversation regarding the possible combination of our businesses . As a follow - up to those discussion , I would care to officially reiterate our interest in pursuing an acquisition of Circuit City . The design of this letter is to secure that there is no ambiguity and to outline our marriage offer .
Our sight for the “ Modern ” Blockbuster is to be the most convenient source for sensitive entertainment . We have undertaken a series of strategical initiatives including sweetening of our core rental business ; a transition from entirely rental to a concentration on consumer retail ; and growth of the tight - uprise digital download mart . We are proud of that these strategical initiatives have begun to ameliorate our fiscal resultant and anticipate further improvement going forward .
The combining of Blockbuster and Circuit City will lead in an $ 18 billion retail initiative uniquely position for the convergence of medium content and electronic gimmick . We would seek to differentiate products in both Blockbuster and Circuit City stores by offer exclusive cognitive content and depicted object - enable devices . Both company would benefit from complementary products , selling , direction strengths , technology and distribution and the resulting synergism would significantly better consolidated financial performance . Overall , I strongly believe that a combination of Blockbuster and Circuit City would deliver significant value to our respective shareholders , enhance the overall customer experience , and energize our employees .
Based on our reappraisal of publically available information , we are confident that we can provide a substantial premium to your shareholders with an all John Cash offering in the range of $ 6.00 to $ 8.00 per ploughshare , capable to due diligence . We are also willing to pursue alternative structures which would enable Circuit City shareowner to receive stock and participate in what we believe would be an exciting futurity for the combined enterprisingness . Given current debt food market weather , we think most of the Johnny Cash necessary would
be generated through the issuing of extra Blockbuster fairness , most probably in a rights offering to our live shareholder . We consider they , and the market , will acknowledge the merits of this dealings and we are surefooted that we can kick upstairs the required equity . The adoption capacity of the combined clientele would allow the remaining cash proceeds .
Time is of the essence and we are focused on minimizing the risk of commercial enterprise gap . We are disposed to commence a very short due app process immediately , on the footing of exclusivity , with the intention of entering into a classical agreement soon thereafter . attach , as an appendix to this letter , you will find a concise listing of the most critical due diligence item which we would want to look back so as to confirm our final offering . We have reexamine this potential transaction with our board of directors , and it is with their full bread and butter that we make this asking to move forward . Given the importance of this chance to Blockbuster and the strong desire to finish it as soon as potential , we would be grateful for your response no later than 5:00 PM CST on February 21 , 2008 .
Again , I thank you for the metre you have spent discussing this opportunity with me . I am prepared to discuss the details of this proposal at your earliest widget and think that we will be capable to rapidly come to a reciprocally beneficial correspondence . I look onwards to working together on this exciting opportunity .
Very really yours ,
Jim Keyes
Chairman and Chief Executive Officer
Blockbuster Inc.
Daily Newsletter
Get the best technical school , scientific discipline , and culture news in your inbox daily .
News from the future tense , deliver to your nowadays .
