Consumer electronics retailer Circuit City Stores, Inc. announced that its board of directors has completed an the evaluation in response to the Feb. 11, 2005, letter of Highfields Capital Management LP indicating interest in acquiring all of Circuit City's outstanding shares.
Based on its evaluation, assisted by Goldman, Sachs & Co., the board announced it has unanimously determined that the transaction proposed by Highfields or other sale alternatives would not be in the best interests of the company's shareholders.
"The board of directors, with the help of outside advisors, carefully evaluated all relevant aspects of the Highfields proposal and of a possible sale process, including the significant risks and uncertainties associated with such a process," said W. Alan McCollough, chairman and CEO of Circuit City.
"We are committed to continuing to unlock shareholder value in Circuit City. The board, management, and our more than 40,000 Associates are focused on that goal by improving our operations and identifying innovations that can enhance our competitive position. Rewarding our shareholders for their confidence in us has always been, and will continue to be, our highest priority," Mr. McCollough said.
Circuit City's board of directors also authorized a U.S. $400 million increase in the company's stock repurchase authorization, raising the total repurchase capacity to $800 million. As of Feb. 28, 2005, the company had repurchased and retired 28.4 million shares at a cost of $344.3 million. With the increased authorization, the company now has approximately $455.7 million authorized for future share repurchases.
to Daily News