With private equity buyers largely paralysed by a lack of credit, merger bankers have moved on to hawking deals that make “strategic sense” – at least in theory. Video rental chain Blockbuster’s bid for Circuit City, the electronics retailer, still triggered a gigantic head scratch from the market.

Blockbuster aims to sell not only films and video games, but the devices that play them. It points to a raft of synergies that it feels can only be secured by combining the two companies. But Circuit City seems to offer few things that Blockbuster cannot do alone. And Circuit City is plagued by a host of maladies that might make Blockbuster’s already challenging position worse.