It is the kind of deal that investment bankers trying to save their jobs and desperate CEOs might dream up. Blockbuster (NYSE:BBI) has proposed to buy Circuit City (NYSE:CC) for $6 to $8 based on due diligence.
According to The Wall Street Journal "Blockbuster said the combination of the two companies would result in an $18 billion global retail enterprise uniquely positioned to capitalize on the growing convergence of media content and electronic devices." The weakness in the argument is that neither company is growing at all.
Over the last three years, Blockbuster's revenue has been flat to down. Competition from online DVD sales companies lead by NetFlix (NASDAQ:NFLX) has robbed the large retailers of customers. VOD over the internet and though cable are further eroding the company's business. Its shares are at just over $3, down from a 52-week high of $6.67.
For the rest of the story go to 24/7 Wall St.
Reader Comments (Page 1 of 1)
4-15-2008 @ 11:05AM
Drvrcop2 said...
hello!!