The BLBlog

The deal is off, says Blockbuster Inc. This past Tuesday, the movie rental chain announced that it would be withdrawing its $1.3 billion offer to buy Richmond-based Circuit City Stores Inc., the Richmond Times-Dispatch reports.

With retailers lowering the purchase price of DVDs and movie-rental alternatives such as NetFlix and OnDemand gaining popularity, Blockbuster sought to take its business in a new direction by acquiring the consumer electronics chain.  The company went public with its plans this past April. But under pressure due to market conditions, Blockbuster walked away from the deal.    

Circuit City’s shares closed yesterday at nearly three times less than their NYSE trading price a year ago. For its first fiscal quarter, the electronics company reported a net loss of $164.8 million. Blockbuster also reported losses this past year.

Circuit City says it will continue to seek other options.