Yesterday, I reported that Blockbuster has taken its unsolicited
$1 billion takeover offer for Circuit City directly to the
electronics retailer's shareholders. Since then, questions have
emerged about the offer, as have some new developments.
Blockbuster first approached Circuit City about the takeover bid
in February, but did so privately. But both Blockbuster and
Circuit City have been struggling financially lately, with
Blockbuster working to find a replacement the slowly dying movie
disc rental business. Circuit City says it rejected
Blockbuster's offer because it doubted that Blockbuster could
raise the necessary financing.  Wall Street, meanwhile, has
reacted with shock at the offer. Analysts see the proposed
merger as a combination of two failing companies, and one that
doesn't make financial sense. Both companies, they note, have
plenty of issues that need to be addressed outside of any
merger.  Citing Blockbuster's inability to actually finance the
deal, Circuit City rejected it and cautioned its s