Billionaire Carl Icahn writes of his plan to acquire Circuit City if Blockbuster's attempt fails; Blockbuster's CEO alerts Circuit City's chief
April 24, 2008
Mr. Jim Keyes
Chairman & Chief Executive Officer
1201 Elm St.
Dallas, Tex. 75270
This is to confirm that I, and/or entities affiliated with me, (collectively with me "Purchaser") stand ready to acquire Circuit City if Blockbuster is unable to receive financing to do so or obtain any necessary shareholder approvals after doing satisfactory due diligence. Obviously, this is subject to Purchaser conducting a satisfactory due diligence review of Circuit City which will be done concurrently with Blockbuster and being satisfied as to the results of that review and of course, Purchaser will be required to obtain certain regulatory approvals which I assume that Purchaser will have no problem obtaining.
I understand this statement is being requested as the final condition to Blockbuster's being permitted to perform due diligence at Circuit City, and I hereby grant Blockbuster permission to forward this letter to Circuit City.
April 24, 2008
Mr. Philip J. Schoonover
Chairman, President and Chief Executive Officer
Circuit City Stores, Inc.
9950 Mayland Drive
Richmond, Va. 23233
You have informed us that Circuit City would not permit Blockbuster due diligence because you are concerned that even if Blockbuster was satisfied with its due diligence it might not be able to get financing, or any requisite shareholder vote needed to complete the purchase. However, your financial advisers have informed us that Circuit City would provide Blockbuster the opportunity to perform due diligence if Carl Icahn would make a public statement that he would acquire Circuit City should Blockbuster and Icahn find the "due diligence" to be satisfactory but Blockbuster is unable to complete the final transaction. Mr. Icahn has agreed to this. Please find letter attached.
As you know, we have been in discussions with you for several months concerning a possible acquisition of Circuit City. As our efforts to obtain access to the information necessary to make a formal proposal and negotiate a purchase agreement were repeatedly rebuffed while this process was confidential, we were compelled to make our interest public so that Circuit City shareholders could consider the merits of our proposal. Since our announcement, your shareholders have indicated strongly to us their desire to pursue such a transaction. We have now satisfied your remaining condition to our being provided access to due diligence materials and trust that it will be made available to us promptly.
We need to bring closure to this process. If we have not been provided the opportunity to begin due diligence by the close of business on Apr. 28, 2008, we plan to announce that we are withdrawing our proposal to acquire Circuit City in light of your refusal to provide us access despite repeated efforts on our part to satisfy your concerns.
Chairman and Chief Executive Officer