Three bidders are involved in negotiations to acquire Circuit City, but the outright liquidation of the company's assets remains the most likely outcome. The bankruptcy court has set a Friday deadline for the company to reach a deal with a buyer and while an extension is possible, nothing has been agreed to so far.According (subscription required) to The Wall Street Journal, Golden Gate Capital is the bidder most likely to gain ownership of the company, but Mexican billionaire Ricardo Salinas Pliego is also in the running. His firm owns more than 1,000 electronics stores in Latin America. Hilco Merchant Resources and Gordon Brothers Retail Partners are also pairing up to make an offer.
The company's results have deteriorated even more than was expected since the bankruptcy filing. Putting aside the short-term macroeconomic problems, Circuit is being squeezed by Best Buy (NASDAQ: BBY) on one side and by Wal-Mart (NYSE: WMT) on the other. There's really no reason for the company to go anywhere other than liquidation, and that's what is likely to happen.
It's a cruel blow to the company's 30,000 employees, who are likely to lose jobs because of incompetence at the highest levels of the company.
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Reader Comments (Page 1 of 1)
1-16-2009 @ 4:59PM
themermaidstore said...
The whole economic situation is scary.. I don't know care what the next president and his newly appointed team/s promise to do--nothing forced is going to make anything better for us. What are they going to do to make it better? Give everyone a job that lost one? Give everyone a raise that needs one? Keep everyone from forclosure? Bail out all insurance, financial institutions? Car industry? Airplane Industry? Lower utility and food costs?? Impossible to do all this & yet this is what it is going to take to make a difference to the masses affected by this. And lets not forget that it was the greedy financial corporations that started all this with their NINA loans. Where were the gov. watchdogs then? Where are they now? I am a small business that has had to lay off my only 2 employees. I am in my 4th year and supposed to be getting somewhere finally. I dont' sell imported crap, either & my customers were happy with my product and prices. Because of the lack of gov watchdog actions, my customers don't have the extra $ to spend on good, USA item!!!! Think I can get a grant, loan or bailout? Hell no! I am going to have to sink with 4 years and $100,000 personal funds.