Management Turnover as Change Agent

Friday, May 9, 2008

CEO Watch - Philip Schoonover, Circuit City, Update 4

Circuit City appears to have made an about face today.  The company announced it has hired Goldman Sachs to help with a potential.  According to DealScape,
There is finally an agreement on the table between Circuit City and Wattles Capital Management LLC, and Circuit City has put itself on the block due to activist pressure, hiring Goldman, Sachs & Co. to manage the sale.
Blockbuster must be happy about the announcement.  One can only assume that Circuit city CEO, Philip Schoonover, recognized the need to try and play ball with Wattles, Blockbuster and Carl Ichan.  Time will tell how all this plays out.  According to the New York Times Deal Book, Ciruit City's change of heart might be due to,
Why the change? A letter from the billionaire investor Carl Icahn, who is Blockbuster’s largest shareholder, seemed to be a major factor. Circuit City said that Mr. Icahn had pledged, with certain conditions, to buy the company on his own if Blockbuster should be unable to finance the deal. “This written commitment answers some of [the company’s] questions with regard to Blockbuster’s and Mr. Icahn’s previous disclosures,” Circuit City said in a news release.
Keep your ears to ground and stay tuned.  There is more to come.

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