LONDON (ShareCast) - Film rental chain Blockbuster is to take its proposed offer for Circuit City Stores direct to shareholders after failing to secure agreement with the Circuit City board for its takeover plans.

Blockbuster and Circuit City have been in merger talks for some months but thus far Circuit City has declined to open its books to enable Blockbuster to perform due diligence and make a definitive offer.

On 17 February, Blockbuster made an approach to Circuit City with an indicative offer of $6 to $8 per Circuit City share. The indicated terms value Circuit City at between $1.01bn and $1.35bn and represent a premium of at least 50% over Circuit City’s closing price last Friday of $3.90.

Blockbuster said it was also prepared to consider offering a share alternative to its cash offer.

Circuit City has been under pressure from activist shareholder Wattles Capital to boost returns to shareholders.

• News Channel