Richmond, Va.-based Circuit City confirmed Friday that it hired Goldman, Sachs & Co. to evaluate strategic options that could lead to a sale.
It also said it reached an agreement with its 6.5% shareholder Wattles Capital Management LLC to let Wattles nominate a slate of three directors.
Blockbuster, which has said it is prepared to offer $6 to $8 per
share for Circuit City, had earlier asked the target to open its books.
But Circuit City questioned whether Blockbuster, which has only $185
million in cash on its books, could finance a bid for a company bigger
than itself. Blockbuster has a market capitalization of $552 million,
compared with Circuit City's $864 million.
Enter Icahn, who has agreed to backstop part of a rights offering to
finance the deal, according to Mark Wattles of Wattles Capital
Management, who has been talking with Icahn for several months.
See the full story from The Daily Deal. - Michael Rudnick
