Blockbuster, Circuit City One Step Closer to Deal

[RobRich]

Despite previous questions about Blockbuster's ability to secure financing, it appears the movie rental service could finally be poised to acquire Circuit City, as the retail electronics heavyweight has retained the services of Goldman Sachs to negotiate a potential dial.

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At the same time, Circuit City comes saddled with 682 locations, many of which are in poor and underperforming areas, a fact that CEO Philip Schoonover often refers to when discussing his company's poor performance.

"While the Circuit City board has confidence in the company's ability to successfully implement its turnaround plan and generate shareholder value, we believe that we can best serve the interests of our shareholders by exploring all possible alternatives to enhance shareholder value," Schoonover said May 9.

Source: MSN Money (BusinessWeek)