The news has been flying fast and furious about Circuit City Stores Inc. today as the battle involving corporate management, dissident shareholders, Blockbuster Inc. and takeover tycoon Carl Icahn reached a critical new stage. Clearly on the defensive, Circuit City made important concessions that it previously had resisted. Here’s the blow by blow.

First, Circuit City announced that it had retained Goldman Sachs & Co. to help explore “strategic alternatives to enhance shareholder value.” Although CEO Philip Schoonover reaffirmed confidence in the company’s ability to implement its turnaround plan, he conceded that it would best serve the interest of shareholders to consider other strategic options.

In the same announcement, the electronic retailing giant also revealed that it had received a letter from Blockbuster, in which the ailing video-rental colossus addressed concerns that it lacked the financial means to successfully finance its takeover of Circuit City for $6 per share. Attached to the Blockbuster letter was one from billionaire Icahn, a Blockbuster director and shareholder, confirming that he personally stood ready to purchase Circuit City if Blockbuster could not.

Schoonover also stated that he agreed to provide access to the company's books, a move he previously had blocked, so Blockbuster and Icahn both could begin exercising their due diligence for the takeover bid.

Next, Blockbuster responded with a brief press release stating its satisfaction with having reached the agreement with Circuit City.

Finally, Circuit City followed up with second release, announcing that it had reached an agreement with dissident shareholder Wattles Capital Management, LLC, in which WCM would nominate three members to the Circuit City board of directors, including one who would serve on the executive committee, for approval in the upcoming  2008 shareholder meeting. In turn, WCM agreed to vote its shares in support of the full slate of directors, including those nominated by Circuit City. "We are pleased that this matter has been resolved in a manner that best serves the interests of all Circuit City shareholders," said Schoonover. "Through this agreement, Circuit City and WCM will avoid a costly and disruptive proxy contest.”

Observers immediately began speculating about the significance of the announcements. Jon Ogg at BloggingBuyouts.com suggested that Circuit City management has bowed to the inevitable. “The company appears to have finally capitulated and realized its days under its own efforts may be limited. … [This] may ultimately lead to the company either being run by a better team or become a subsidiary of another company.”

Circuit City’s shares climbed more than 8 percent on the news.