Analysts Skeptical on Circuit City/Blockbuster Merger
In reaction to Blockbuster’s offer to buy Circuit City for $1 billion, Wall Street analysts quoted by the New York Times are skeptical that the deal will ultimately come to fruition.
“Nobody likes this deal,” one analyst told the Times, citing Blockbuster’s own financial problems, as well as Circuit City’s own skepticism that Blockbuster will be able to consummate the deal. Blockbuster shares actually dropped following the announcement of the offer.
On Monday, Blockbuster went public about making the merger offer, which the companies had discussed informally over the past few months. Circuit City reacted less-than-positively, questioning whether Blockbuster had the “structure, sources and uses of funds and consents required” for the deal, but vowed to consider it regardless.