Circuit City in Acquisition Talks9 Jan, 2009 By: Erik Gruenwedel
Bankrupt Circuit City Stores Jan. 9 said it is in talks with two possible suitors after receiving permission by a U.S. Bankruptcy Court judge to sell the chain as a going concern, separate business units or as individual assets, including the sale of inventory.
The Richmond, Va.-based No. 2 consumer electronics retailer said the interested parties are considering providing additional financing to allow the company to sustain operations and move forward with a subsequent restructuring through a standalone plan and/or purchasing the company or substantially all of its assets.
This marks the second time since last May that outside parties have expressed interest and proceeded with due diligence of Circuit City’s finances. Last year Blockbuster Inc. initiated a $1 billion acquisition offer for Circuit City, which the Dallas-based No. 1 DVD rental subsequently withdrew, citing market conditions.
“We’re optimistic and hopeful,” CFO Bruce Besanko told The Associated Press.
Circuit City, which operates 565 stores in the United States, posted losses for seven of the last eight quarters and filed for Chapter 11 bankruptcy protection last November, citing $3.4 billion in assets and $2.32 billion in liabilities.
The chain said it planned to emerge from court protection in the first half of 2009.