Circuit City Opens Books to Blockbuster

After months of talks, a reluctant Circuit City is finally allowing Blockbuster and its activist shareholder Carl Icahn to look at its books. Blockbuster and Icahn have faced much opposition from City management in allowing them access to information they must have to do their due diligence prior to making an offer for City. Mr. Icahn had to furnish a letter that he would be willing to buy Circuit City if Blockbuster was not able to get the financing or shareholder approval to do so after satisfactory due diligence.

The exchange of letters between Carl Icahn, Blockbuster CEO Jim Keyes and Circuit City Philip Schoonover on access to City’s books can be seen here at The Wall Street Journal’s website.

Icahn, through his investment firm, controls 9.5 percent of Blockbuster, worth $36.2 million. He owns nothing of Circuit City as yet. He apparently sees some impressive returns in a Circuit City-Blockbuster merger if he’s willing to risk up to $1 billion to protect his $36 million stake.

You can read more about this latest Blockbuster-Circuit City development at ars technica.

Link:
Blockbuster willing to take on more debt to buy Circuit City