Monday, April 14, 2008

Blockbuster seeks huge acquisition

File this one under the "what are they thinking" category. Game and movie rental giant Blockbuster has made a bid to buy entertainment retailer Circuit City.

The gaming industry has seen more than its fair share of consolidation in recent months, with a spate of publishing-giant mergers, studio acquisitions, and developer closures. Now, two of the businesses that distribute the industry's wares are getting into the fortification game. Rental kingpin Blockbuster said today it has offered to acquire Circuit City for $6 to $8 per share, or $1 billion to $1.3 billion.

You can read the full article at Gamespot. I was under the impression that Blockbuster was almost belly up. This seems like a crazy move for them to make, and I really see no justification in this. It will be interesting to see just how this all plays out.

1 comment:

Dan Whisenhunt said...

Get a load of this paragraph further down....

Prolific Wedbush Morgan Securities analyst Michael Pachter was quick to raise skepticism over Blockbuster's proposed buyout offer. "We think that Blockbuster's move is premature, and borders on being reckless," said Pachter, noting that Circuit City "appears to be in the middle of a death spiral" due to "a worsening economic environment, a well-run competitor [Best Buy], and a constantly changing product offering."