Circuit City
US movie rental giant pulls out of $1bn deal to buy US electrical retailer Circuit City

With nearly 700 superstores, it's little wonder Fortune 500 company Circuit City proved attractive to one-time rental giant Blockbuster.

The plan had been to combine content and technology under one roof, but Blockbuster have pulled the plug on the $1bn deal, saying in a statement "It is not in the best interests of Blockbuster's shareholders to proceed with an acquisition of Circuit City".

Circuit City recently reported a loss of £165m in its first fiscal quarter, up $110m on last year's loss. 

However, US city observers had also doubted Blockbuster's ability to come up with the $1bn needed to complete the deal. The chain has lost significant amounts of money in recent years as the competition from online rental firms, with their low overheads, hots up.