Circuit City: Icahn Could Acquire Company if Blockbuster Can't

Authored by Mark Hefflinger on May 9, 2008 - 7:38am.

Richmond, Va. - One month after revealing an unsolicited $1 billion takeover bid from Blockbuster (NYSE: BBI), consumer electronics retailer Circuit City (NYSE: CC) said on Friday that it will open its books to the video rental giant in preparation for a potential acquisition.

Circuit City also said that if Blockbuster can't gain the necessary financing or shareholder approval to close the deal, its largest shareholder, billionaire financier Carl Icahn, could do it himself, according to a letter the company received.

"The letter from Mr. Icahn states that... Mr. Icahn and/or entities affiliated with him stand ready to purchase Circuit City if Blockbuster were unable to," Circuit City said in a statement.

Blockbuster has said that the combination would create an $18 billion company that could capitalize on the "growing convergence of media content and electronic devices."

Circuit City has retained Goldman Sachs to help it explore a possible sale.