Friday May 9, 02:21 PM
Circuit City reaches agreement with Wattles Capital; exploring strategic options
BOSTON (Thomson Financial) - Circuit City Stores Inc. said Friday it is exploring a full range of strategic alternatives to enhance shareholder value and that it has agreed to elect three of Wattles Capital Management's nominees to its board in order to avoid a proxy contest.
As part of the agreement, Wattles Capital Management, which owns roughly 11 million shares of Circuit City common stock, representing about 6.5% of shares outstanding, has agreed not to solicit proxies in connection with Circuit City's 2008 annual meeting of shareholders.
The company also said it has retained the services of Goldman Sachs (NYSE: GS - news) & Co. to assist it in the exploring strategic alternatives and that it will allow Blockbuster Inc (NYSE: BBI - news) . and its primary shareholder, Carl Icahn, to conduct additional due diligence.
On April 14, Blockbuster proposed an acquisition of Circuit City of 'at least' $6 a share in cash.
Shares of Circuit City, a Richmond, Va.-based consumer electronics retailer, rose 9% to $5.22 in premarket trading.
Greg Saulnier
gs/vj
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