It seems that Circuit City is going to let Blockbuster do their due diligence to narrow down their bid.
Shares of Circuit City Stores Inc. rose on Friday, after the consumer electronics retailer said it would allow Blockbuster to review its books.
Also, the Blockbuster's largest shareholder, Carl Icahn, said he would buy the company on its own if Blockbuster doesn't find financing.
I think it is positive for the stock that Icahn will backstop the deal if it falls through. I am still sceptical this tie up though. I think if people get used to visting a Blockbuster that would be inside of a Circuit City store then maybe it could work. I know Blockbuster will be able to close some stores and that would provide a nice bump in same store sales.
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