Circuit City gets an offer

Circuit City (CC) got a cash offer of around $17/share. I have been waiting for this for a while now, buying Circuit City shares a few times last year, at an average of $11.2/share. This bid represents a premium of 52%.

This particular offer, though valuing Circuit City fairly, is from a hedge fund, Highfields Capital Management, and is most likely not a serious one.It will be met with competing offers.

Mexican retail king, Carlos Slim will be forced to bid again; his offer, almost of a year ago, of $8/share, was rejected by Circuit City. The recent windfall from Verizon's offer to buy MCI (Mr. Slim owned millions worth of MCI shares) should make it easier for him to throw money at a sweetened offer.

While not a serious one, this bid indicates that the retail sector has some value to offer now. So, who could be next ? I think Sharper Image (SHRP), Pier 1 Imports PIR) and Tweeter (TWTR) will all be targets soon. I own a few of Sharper Image and Pier 1 Imports; both are still cheap.