New York City Blockbuster Inc. is studying various options to fund its buyout offer of Circuit City, such as using Circuit City's own balance sheet, even as the electronics retailer is asking Blockbuster to prove it can handle an all-cash bid, the Wall Street Journal reported on Monday.
Blockbuster is also considering using its existing debt facility, possible asset sales and cost savings for the deal, the report said.
Last week, Blockbuster offered up to $1.3 billion to buy Circuit City but the offer has drawn doubts from Wall Street, investors and Circuit City itself over how Blockbuster will fund the bid.
While investors fear that Blockbuster may need to raise new debt or renegotiate its current debt to finance the offer, Blockbuster is hopeful that it has alternative funds to sidestep that possibility, the report said.
Still, Blockbuster will not go ahead with the offer if it does not like what it sees in Circuit City's financial books, the report said in a separate report, citing an interview with Blockbuster CEO Jim Keyes.
Circuit City has not allowed Blockbuster to see its books.