In a statement Monday, Blockbuster chairman and CEO Jim Keyesrevealed a letter to Circuit City chairman, president and CEOPhilip Schoonover that shows his firm has been chasing Circuit Citysince at least February. "The combination...will result in an $18billion retail enterprise uniquely positioned for the convergenceof media content and electronic devices," Keyes said in theletter.

However, it's not clear what that means, and a conference callMonday didn't really clear things up. It's assumed that eachcompany's products would be offered in joint stores. But whilegiant Blockbuster has more than 7,800 stores across the globe, andfinally reported a same-story sale increase for the fourth quarter,the electronics company has 1,472, albeit bigger, stores in the USand Canada, and recently reported a $320 million loss during itspast fiscal year.

Circuit City responded in a statement Monday by putting on thebrakes, advising shareholders to take no action. Blockbuster hasbeen unable to satisfy Circuit City and its advisors that theproposal could be financed, said Circuit City officials in thestatement.