Blockbuster Withdraws Plan to Acquire Circuit City

Dallas Blockbuster Inc. said Tuesday it is withdrawing its proposal to buy Circuit City Stores Inc.

Blockbuster CEO James Keyes said in a written statement that the proposed deal, at a price of more than $1 billion, didn't make sense because of market conditions.

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.

Circuit City CEO Philip J. Schoonover said his board was still exploring strategies to help shareholders, which he said didn't require Blockbuster's presence.