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Dallas Blockbuster Inc. said Monday it will present an unsolicited $1 billion-plus bid for Circuit City Stores Inc. directly to shareholders of the consumer-electronics chain, saying the retailer has not responded to repeated offers.
Blockbuster CEO James Keyes said a deal would create a chain that could sell portable devices and entertainment for them, much like Apple Inc.'s stores. Keyes said the offer is supported by Blockbuster board member Carl Icahn, who could be a source of financing for the deal, according to the Associated Press.
Circuit City said it has exchanged information with Blockbuster but wasn't convinced how the movie-rental chain would finance its offer. Circuit City advised its shareholders to take no action until the company board reviews the bid.
Blockbuster said it has been in talks with Circuit City for months regarding an acquisition, and sent a letter on Feb. 17 to Circuit City chairman and CEO Philip Schoonover offering $6 to $8 per share in cash for the company.
Based on Circuit City's 168.4 million shares outstanding at Dec. 31, 2007, the deal values Circuit City at $1.01 billion to $1.35 billion.