San Antonio — The Progressive Retailers Organization was at the Westin La Cantera Hill Coun
Mexican billionaire Ricardo Salinas Pliego acknowledged in a filing that he may seek control of Circuit City.
The banking, broadcasting and retail tycoon became the company's largest shareholder last month after snatching up 28.1 percent of Circuit City stock for $41.4 million.
Pliego indicated in a Nov. 20 filing with the Securities and Exchange Commission (SEC) that he acquired the stake "with a view towards possibly seeking influence over the management, business and operations" of the chain.
He also reserved the right to contact Circuit City's management and board regarding alternative strategies, and he indicated he may "take positions" advocating changes to all three — including a possible change in control of the company — although he has no present plans or proposals to do so.
Pliego will also gain access to Circuit City's books under terms of a non-disclosure agreement executed by his company, Grupo Salinas.
A 2006 settlement with the SEC on fraud charges related to dealings between his broadcasting company and a private business he secretly co-owned precludes Pliego from sitting on the board or serving as an officer of a public U.S. company for three more years. But the constraints wouldn't apply if Circuit City was taken private, which some observers say would benefit the chain by removing it from public scrutiny and the demands of investors.
In an interview with The Associated Press, a Grupo Salinas spokesperson described Circuit City as "a great trademark" with "great market opportunity." He said Pliego is "furthering his investments in a business he knows very well," and is conducting "a very thorough and detailed analysis [of] what the next steps should be."
Pliego, whose conglomerate encompasses retailing, banking, TV broadcasting and wireless services, currently controls 47.2 million shares of Circuit City stock. Of that, 30 million shares were acquired over a three-day period at an average price of 24 cents per share following the retailer's bankruptcy filing last month, SEC documents show.
His 28.1 percent stake makes him the company's largest shareholder. By comparison, activist investor Mark Wattles, who successfully agitated for change on Circuit City's board, holds a 6.5 percent position with the company.
Forbes pegs the Pliego family as the world's 154th wealthiest, with a net worth of $6.3 billion. Their holdings include Elektra, a leading Latin American CE and appliance chain that carries its own line of Elektra brand consumer electronics.