July 3, 2008 / 9:06 AM / 11 years ago

Blockbuster may do Circuit deal later: report

A customer leaves a Circuit City store in Dallas, Texas June 19, 2008. REUTERS/Jessica Rinaldi

(Reuters) - Blockbuster Inc BBI.N, which abandoned its offer to buy Circuit City Stores Inc (CC.N) this week, may try to acquire the electronics retailer later, the New York Post said Thursday citing insiders.

One source told the paper that Blockbuster “verified the long-term benefits of a deal,” and added that a there was a “real opportunity” to cut costs in combining the two chains’ operations.

“Management didn’t really put its case in front of shareholders yet,” the source told the paper.

The video-rental company in April disclosed that it had offered to buy Circuit City in February for $6 to $8 a share, or up to $1.3 billion.

However, Blockbuster Chief Executive Jim Keyes had cited “market conditions” as a reason for withdrawing the offer and said the deal was not in the best interests of its shareholders.

Analysts have questioned the strategic fit of the two companies and how the acquisition would be financed.

The paper’s sources added that Best Buy Co Inc (BBY.N) isn’t interested in Circuit City due to anti-trust concerns.

Blockbuster’s shares closed up over 5 percent at $2.65 Wednesday on the New York Stock Exchange. Circuit City’s shares fell 9 percent to close at $2.32.

Blockbuster and Circuit City were not immediately available to comment.

Reporting by Ajay Kamalakaran in Bangalore; Editing by Erica Billingham

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