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Circuit City And Wattles Capital Management Reach Agreement
Circuit City And Wattles Capital Management Reach Agreement
RICHMOND, Va., May 9 /PRNewswire-FirstCall/ -- Circuit City Stores, Inc.
(NYSE: CC) and Wattles Capital Management, LLC ("WCM") today announced that
they have reached an agreement under which Circuit City's board of directors
will select three of WCM's director nominees and include them as nominees of
the board at Circuit City's 2008 Annual Meeting. In addition, one of the WCM
nominees will become a member of the executive committee of the Circuit City
board.
As part of the agreement, WCM, which, together with its affiliates,
beneficially owns approximately 11,000,000 shares of Circuit City common
stock, representing approximately 6.5 percent of Circuit City's outstanding
shares, has agreed not to solicit proxies in connection with the 2008 Annual
Meeting; to vote its shares in support of all of the board's director nominees
at the 2008 Annual Meeting; and to abide by certain confidentiality and
standstill provisions through the completion of the 2009 Annual Meeting. At
least two of Circuit City's current directors will either step down or decline
to stand for reelection at the company's 2009 Annual Meeting of Shareholders.
"We are pleased that this matter has been resolved in a manner that best
serves the interests of all Circuit City shareholders," said Philip J.
Schoonover, chairman, president and chief executive officer of Circuit City.
"Through this agreement, Circuit City and WCM will avoid a costly and
disruptive proxy contest at a time when the company is exploring a full range
of strategic alternatives to enhance shareholder value. Our board and
management team also can remain focused on serving our customers and executing
our business plan as we continue to pursue the many opportunities that lie
ahead for our company."
"I am confident that the Circuit City board and Goldman Sachs are
committed to a process that will maximize shareholder value," said Mark
Wattles, founder and CEO of Wattles Capital Management. "As a result, we were
able to resolve our differences and will now work to support that process in
any way we can."
The complete agreement will be included as an exhibit to the company's
Form 8-K to be filed with the Securities and Exchange Commission.
Circuit City, in a separate news release, also today announced that it is
exploring strategic alternatives to enhance shareholder value and, as part of
that process, will allow Blockbuster Inc. (NYSE: BBI) and its largest
shareholder Carl Icahn to conduct due diligence in connection with
Blockbuster's proposal to acquire Circuit City.
About Wattles Capital Management, LLC
Wattles Capital Management, LLC ("WCM") makes public and private
investments primarily in retail, entertainment and consumer products companies
where it sees the potential to increase value through growth or an operating
turnaround. WCM was founded and is managed by Mark Wattles, the founder,
Chairman and CEO responsible for building more than 2,000 Hollywood Videos and
700 Game Crazy stores before selling the Company for approximately $1.25
billion in April 2005. WCM has an operating group that has significant
expertise in managing rapid growth and turnaround situations. As such, WCM is
well-positioned to invest in companies that it believes require more active
involvement in order to realize value. In addition to its holdings of Circuit
City Stores, Inc., WCM owns and operates a chain of consumer electronics
superstores operating under the name Ultimate Electronics.
About Circuit City Stores, Inc.
Circuit City Stores, Inc. (NYSE: CC) is a leading specialty retailer of
consumer electronics and related services. At February 29, the domestic
segment operated 682 Superstores and 11 other locations in 158 U.S. media
markets. At February 29, the international segment operated through 779
retail stores and dealer outlets inCanada. Circuit City also operates Web
sites at www.circuitcity.com, www.thesource.ca and www.firedog.com.
This communication may be deemed to be solicitation material in respect of
Circuit City's solicitation of proxies in connection with its 2008 Annual
Meeting of Shareholders. Circuit City and its directors and executive
officers may be deemed to be participants in such solicitation of proxies.
Information regarding the special interests of these directors and executive
officers in such solicitation of proxies will be included in any proxy
statement filed by Circuit City in connection with the 2008 Annual Meeting of
Shareholders. In addition, Circuit City files annual, quarterly and special
reports, proxy and information statements, and other information with the
Securities and Exchange Commission (SEC). These documents are available free
of charge at the SEC's Web site at www.sec.gov or from Circuit City at
http://investor.circuitcity.com. Investors should read any proxy statement
filed in connection with the 2008 Annual Meeting of Shareholders carefully
when it becomes available before making any voting or investment decision.
(Logo: http://www.newscom.com/cgi-bin/prnh/20010709/CCLOGO )
SOURCE Circuit City Stores, Inc.
Copyright © 2008, PRNewswire
Copyright © 2008, NewsBlaze,
Daily NewsTags: Tags: Wal Mart, Sears, Nordstrom and other Retail, , Computers and Electronics, Banking and Finance, High Tech, virginia
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