bloggingbuyouts

Circuit City Stores, Inc. (NYSE: CC) is sitting on the brink of a buyout. The question is who, and how much. The deal with Blockbuster Inc. (NYSE: BBI) is still very possible, but investor Mark Wattles of Wattles Capital Management has said to expect a deal within four weeks regardless. With Circuit City shares nearly the bottom -- closing yesterday at $4.35 -- some entity needs to swoop in and just offer cash for the company. As in, now.

It's a foregone conclusion that Circuit City can't compete with other national consumer electronics retailers. The access to its prime real estate locations would be a main reason for the chain to be bought up at such a fire sale price. Wattles said Blockbuster and two unnamed private equity firms are most likely the three finalists ready to step up and purchase Circuit City.

While all this "due diligence" is going on for buying a retailer at such a low price, shareholders are getting antsy with good reason. It's hard to imagine any shareholder making out on Circuit City stock -- including Wattles who stands to lose a good chunk of change unless the shares rebound. Circuit City's largest investor, HBK Investments (a 9% stake), probably needs to have a deal done as soon as possible with a sweet premium to the current share price. Who could blame them?

Regardless of who buys Circuit City, this is a company that needs to return shareholder equity back to its shareholders and just fold up and go away. It's not going to get any better.

The potential collapse of the $10.6 billion buyout of Huntsman Corp. (NYSE: HUN) is hardly a shock.

For one thing, rising oil prices are crushing specialty chemical makers. Another thing is that the deal was announced almost a year ago, an eternity for the closing of a merger and acquisition. The Wall Street Journal argues that private equity shop Apollo Management and its Hexcion Specialty Chemicals Inc. are making a "novel" argument to get out of the deal.

"In a complaint filed in the Delaware Court of Chancery, Hexion said Huntsman's poor financial results -- increased net debt and lower-than-expected earnings -- would render the combined company insolvent," the paper said, adding that legal experts expect Huntsman to file a countersuit. Of course, shares of Salt Lake City-based Huntsman were plunging in premarket action and will likely open much, much lower. CNBC's David Faber points out that the Huntsman deal was "held out" to be the strongest of the LBO deals. That's scary.

In a press release, Huntsman CEO Peter Huntsman said, "These actions appear to be a blatant attempt to deprive our shareholders of the benefits of the Merger Agreement that was agreed to nearly a year ago." The company added that it intends to "vigorously enforce" its rights under the merger agreement and seek to consummate the merger under the agreed upon terms.