RICHMOND, VA-Circuit City’s management is letting Blockbuster Inc., along with the video chain’s largest shareholder and renowned billionaire financier Carl Icahn, conduct due diligence in order to acquire the locally-based electronics retailer. Circuit City first made a potential Blockbuster offer public last month.

“Let me be clear that our decision to allow Blockbuster and Carl Icahn to conduct due diligence should not be taken as an indication that the board has completed its review of the Blockbuster proposal, that the board has taken a position on the company’s value or that it has settled upon a particular strategic course of action,” said Philip Schoonover, Circuit City’s chairman, president and chief executive officer.

Blockbuster and Icahn’s proposal includes a condition, in which, if the former is not able to finance a deal, Ichan and his affiliates could step in and make the acquisition of Circuit City. Ichan, who Forbes magazine listed last year as the 42nd-richest person in the world with a net worth of $13 billion, is chairman of New York City-based Icahn Enterprises, which invests in real estate, home fashion and metals.

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