Analysts Skeptical Of Blockbuster's Bid For Circuit City |
| CNNMoney.com - Apr 15, 2008 |
Blockbuster Inc.'s attempt to buy Circuit City is baffling to many analysts, who think the video-rental chain needs more time to turn itself around before undertaking a costly acquisition.
Another question on their minds is whether consumers will embrace the merged concept if it does become a reality.
Blockbuster (BBI) announced Monday an offer to buy Circuit City (CC) for at least $6 a share, or more than $1 billion, provided the video chain can complete the due diligence and raise the necessary funding. Blockbuster said the combination would create an $18 billion "game-changing retail concept."
"I think it's kind of screwy," says Michael Pachter of Wedbush Morgan Securities. "Because if, in fact, you wanted to go to a big-box retailer to rent movies, why wouldn't Costco have them? Why wouldn't Target? Or Wal-Mart? If it's such a great business, and you can leverage the store base, why isn't everyone doing it?"
Read Full Article from CNNMoney.com
- Posted: 2008-04-15 08:31:57
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