Blockbuster Inc. made an unsolicited proposal to acquire Circuit City Stores Inc, the second largest U.S. electronic retailer, in a bid said to worth around $1 billion. Blockbuster is prepared to offer at least $6 a share, subject to due diligence, and decided to make the bid public "because it believes the shareholders of Circuit City should have the opportunity to participate in determining the destiny of the company," Blockbuster said in a statement.

Mark Wattles, who has nominated five people to the board of Circuit City Stores, said that Carl Icahn would be willing to help fund Blockbuster's attempted buyout of the electronics chain. "I did get confirmation that he supported the transaction and (was) willing to put up capital to get the transaction done," Wattles said in an interview for the CNBC network.

In a letter sent to Circuit City Stores on February 17, Blockbuster said "both companies would benefit from complementary products, marketing, management strengths, technology and distribution," and it would all greatly benefit them financially. The company said in the same letter that the combination of Blockbuster and Circuit City would result in an $18 billion retail enterprise.

But as Circuit City failed to provide the necessary diligence for a definitive proposal from Blockbuster, the world’s largest movie rental chain decided to go public with the bid, saying it can provide an offer ranging from $6 to $8 a share. Circuit City on the other hand was not available for comments regarding the unsolicited proposal.

"We are also willing to pursue alternative structures which would enable Circuit City shareholders to receive stock and participate in what we believe would be an exciting future for the combined enterprise," Blockbuster also said.

The financial forecast from Blockbuster shows a $30 million net income in the first quarter, compared to a net loss of $49 million last year. Blockbuster, whose stock has fallen nearly 60 percent in the last year, has seen its shares drop another 17 percent, to $2.60 a share, after the proposed bid was announced on Monday.