Blockbuster Inc., America's No. 1 movie-rental chain, said Tuesday it is withdrawing its proposal to buy Circuit City Stores Inc., the big-box electronics retailer whose sales have tumbled this year.
Chief Executive James Keyes said in a written statement that the proposed deal, at a price of 1 billion U.S. dollars or more, no longer makes sense because of market conditions.
Instead, Blockbuster will still try to merge content such as movies and games with the sale of electronic devices under one roof — but it will be at Blockbuster's own stores, Keyes said.
Dallas-based Blockbuster announced in April that it had offered at least 1 billion dollars for Circuit City and planned to create a 9,300-store chain.
Blockbuster went public with its offer after its initial overtures were ignored by Circuit City's board. Eventually, the Richmond, Virginia-based company agreed to open its books to Blockbuster.
But the deal was viewed with skepticism by many investors, and pressure on Blockbuster to walk away grew in June, when Circuit City reported its loss tripled and same-store sales plunged 11 percent in the quarter that ended May 31.
It was a difficult period for other retailers too, but Circuit City's performance was worse than rival Best Buy Co., which saw its profit decline in the same period by 7 percent.
Source:Xinhua/Agencies
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