June 24, 2008 / 8:07 PM / 12 years ago

Circuit City may have several bidders: investor

ATLANTA (Reuters) - Retailer Circuit City Stores Inc (CC.N) has received buyout interest from several strategic and financial bidders, including movie-rental company Blockbuster Inc BBI.N, and a sales agreement could be announced over the next month, an institutional investor said on Tuesday.

A Circuit City store is seen in Dallas, Texas June 19, 2008. REUTERS/Jessica Rinaldi

“I am very confident that we will be seeing who the buyer of Circuit City is in the next three or four weeks and what the price is,” Mark Wattles told Reuters by phone after Circuit City’s annual meeting in Richmond, Virginia. Wattles Capital Management owns about 6.5 percent of Circuit City stock.

Wattles, the founder of Hollywood Entertainment Corp, said he obtained confirmation from parties directly involved that the Circuit City due diligence process “has gone very well and that they indeed have multiple bidders that are very interested” in the consumer electronics retailer.

A Circuit City spokesman declined to comment on Tuesday.

Circuit City opened its financial books to Blockbuster last month and said it was exploring strategic options.

Circuit City shares closed down 2 cents at $3.35 on the New York Stock Exchange. The stock fell 21 percent Monday on concerns about prospects for a sale and the company’s ability to turn around its business.

Blockbuster shares ended up 10 cents, or 4 percent, at $2.62 after earlier rising nearly 13 percent as one analyst cited investor speculation that the effort to buy Circuit City was falling apart.

Blockbuster disclosed in April it had offered as much as $1.3 billion, or $6 to $8 a share, to acquire Circuit City. But since Circuit City reported a quarterly loss and cut its dividend last week, analysts have raised the possibility that Blockbuster might lower its offer or walk away from a potential deal.

Wattles, whose firm has gained seats on Circuit City’s board, said the retailer’s stock has seesawed in recent days on speculation over whether Blockbuster would complete a deal.

Blockbuster was “just one of the players,” said Wattles, who called on Circuit City to take steps to boost shareholder value earlier this year.

A Blockbuster spokesman said his company was still conducting due diligence and would proceed with a transaction “if it makes sense financially and strategically and also creates significant value for our shareholders.”

Reporting by Karen Jacobs, additional reporting by Gina Keating in Los Angeles, editing by Richard Chang

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