RSSBlockbuster drops its Circuit City buyout bid
By Tim Conneally | Published July 2, 2008, 1:18 PM
Blockbuster has withdrawn its proposal to buy out Circuit City, quickly vaporizing the $18 billion combined retail enterprise the video rental company had envisioned.
Jim Keyes, Chairman and CEO of Blockbuster yesterday issued a statement saying that his company has determined the Circuit City acquisition to be "not in the best interest of Blockbuster's shareholders."
Circuit City recently opened its books to Blockbuster so that a due diligence assessment could be made pending an acquisition. Apparently the evaluation of these records was a main impetus for Blockbuster's withdrawal.
Earlier this year, The Wall Street Journal's Herb Greenberg picked Circuit City's Phillip Schoonover as the Worst CEO of 2008, citing the company's widespread employee layoffs as a major contributor to its 80% stock decline over the course of 52 weeks. The company's shares this week have seen a steady decline in trading value.
Schoonover made his own announcement coinciding with Keyes', noting that Blockbusters' withdrawal will not affect Circuit City's "strategic course of action." What that course is, however, was not fully explained. "Our exploration of strategic alternatives is intended to serve the interests of our shareholders by considering every possible alternative to enhance shareholder value...We are diligently working with the parties involved in the process, and intend to continue our thorough approach until such point as the board determines upon a particular strategic course of action. The board has not established a deadline for completing the review."
With Blockbuster's $1 billion dollar bid off the table, investor Carl Icahn's presence remains. Shortly after Blockbuster displayed interest in an acquisition, The billionaire reportedly sent a letter to Circuit City informing the company that he would initiate a buyout if Blockbuster couldn't.
In Keyes' public letter to Schoonover in April he said, "We would seek to differentiate products in both Blockbuster and Circuit City stores by offering exclusive content and content-enabled devices. Both companies would benefit from complementary products, marketing, management strengths, technology and distribution and the resulting synergies would significantly improve consolidated financial performance."
For Blockbuster's future course of action now that Circuit City will not be acquired, Keyes echoed his earlier sentiments, "We continue to believe in the strategic merits of a consumer retail proposition that would bring media content and electronic devices together under one brand. We will pursue this strategy through our Blockbuster stores as a way to diversify the business and better serve the entertainment retail segment."
Gee.. what a shocker. One "going down the toilet" company drops it's bid to buy another "going down the toilet" company
Have a nice day):
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|Someone needs to buy this company and overhaul their staff. I work in a customer service oriented business and "customer service" is almost nonexistent in any of the Circuit City stores that I have attended. I can walk around the store for 30min without anyone asking me if I need help and I can only assume that is because they are mostly young kids that don't give a crap to begin with.
There has also been many occasions in the past where I order online and pickup in the store, get there an hour later and my stuff isn't pulled. I then have to wait an additional 30min for them to retrieve my order while they drift around the store (however I have gotten 5 $24 gift cards this year). Then after checking out go to leave and the alarm goes off and I stop and look for someone to show them my receipt and there is no one even looking!. Of course I go looking for someone and tell them I set the alarm off and they still do not even look at my receipt, they just tell me "go ahead, it's ok". WTF kind of company can remain open operating like this?
I now do all of my shopping at Best Buy even tho they tend to be a little more expensive in most of my cases.
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|what is really sad is it didn't use to be that way. When I worked there in 94. They had commissioned sales people. Even if you don't like commissioned sales people they at least tried to help you. no service, no sale, no paycheck. When they went to hourly. no incentive to work just clock in pick up your check. If there is no incentive for better customer service why even bother. I had made pretty good money and had repeat customers that always asked for me. When they went the Best Buy way that was the end of Circuit City. I had plenty of customer go to Best Buy and get no help and the Sale Clerks had no clue what they were selling. Since we matched anyone prices they would come back to me. Poor management now. So Sad I won't even buy from them anymore.
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