Blockbuster Bids One Billion To Takeover Circuit City

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Circuit City and Blockbuster are two brand names that have seen their better days. The two companies have both been struggling in recent years. Circuit City has been trounced operationally by Best Buy, while BlockBuster had their asses handed to them by Netflix. So what to do with the struggling companies?

The current idea is that BBI will acquire Circuit City for around $1 billion.

Circuit City shares climbed 60 percent in premarket trading.

Blockbuster Chief Executive James Keyes said a deal would create a chain that could sell portable devices and entertainment for them, much like Apple Inc.’s stores.

So far Circuit City is not sure about the deal, and whether BBI can pull off the financing. Their shares went up 55% in today’s trading on the news.

It’s tough to say how people will view the trade. These are two struggling companies in a slow economic period facing competition who has been beating them. Whether a merger will help, or actually hasten their demise is unknown.

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