Circuit City Agrees to Open Books to Blockbuster
Posted on: Friday, 9 May 2008, 15:00 CDT
Circuit City Stores Inc. has come to terms with dissident shareholder Mark Wattles and also has agreed to open its books to Blockbuster Inc and financier Carl Icahn.
By settling with Wattles and agreeing to allow the video-rental chain in, Circuit City avoids a drawn out proxy fight and opens itself up to be sold.
The Henrico County chain will allow three of Wattles' nominees to stand for election at the company's annual meeting June 24. Additionally, an employee of Wattles Capital Management LLC will become a member of Circuit City's executive committee.
Last month, Blockbuster went public with a nearly $1.3 billion offer to purchase Circuit City pending review of the chain's finances.
The retailer had balked, citing concerns with the movie-rental chain's ability to pay for the transaction.
It had come under increasing pressure from its largest shareholders, including Wattles, who owns 6.5 percent of Circuit City's stock, to open its books.
Circuit City has also been contacted by Icahn who said he would buy the company if Blockbuster didn't. Icahn, Blockbuster's largest shareholder, has said from the beginning that he would he help finance the deal between the two chains if needed.
"We are pleased that this matter has been resolved in a manner that best serves the interests of all Circuit City shareholders," said Philip J. Schoonover, president and chief executive officer of Circuit City said in a statement.
Source: Richmond Times-Dispatch
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