Blockbuster announced today that they're withdrawing their bid to acquire Circuit City. According to the press release, they're withdrawing because of market conditions and they didn't like what they saw after doing due diligence.

Blockbuster made public its intention to acquire Circuit City for at least $6/share in April after being rebuffed by the electronic chain. The deal had the backing of Carl Icahn and the two companies were to merge to form a media company (Blockbuster Media) where they'll try to pair content with electronics. That plan had many distracters, including me.

The full press release below:

Blockbuster Withdraws Proposal To Acquire Circuit City

DALLAS, July 1, 2008 - Blockbuster Inc. (NYSE: BBI, BBI.B) announced today that it has decided to withdraw its proposal to acquire Circuit City.

"Based on market conditions and the completion of our initial due diligence process, we have determined that it is not in the best interest of Blockbuster's shareholders to proceed with an acquisition of Circuit City," said Jim Keyes, Blockbuster Chairman and CEO. "We continue to believe in the strategic merits of a consumer retail proposition that would bring media content and electronic devices together under one brand. We will pursue this strategy through our Blockbuster stores as a way to diversify the business and better serve the entertainment retail segment."

About Blockbuster
Blockbuster Inc. (NYSE: BBI, BBI.B) is a leading global provider of in-home movie and game entertainment, with more than 7,700 stores throughout the Americas, Europe, Asia and Australia. The company may be accessed worldwide at www.blockbuster.com.

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Karen Raskopf
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OR
Randy Hargrove
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Investor Contact:
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