Circuit City, which has lost market share to Best Buy and continues to report disappointing sales, received a $3. 25 billion cash buyout...

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RICHMOND, Va. — Circuit City, which has lost market share to Best Buy and continues to report disappointing sales, received a $3.25 billion cash buyout offer from a Boston investment firm known for rattling management at underperforming companies.

The nation’s No. 2 chain of consumer-electronics stores said yesterday that its board of directors will “carefully evaluate” the unsolicited offer from shareholder Highfields Capital Management, which contends it has a plan for reversing Circuit City’s fortunes.

“We are convinced that as a private company, Circuit City will be able to effect change more rapidly with fewer constraints,” Highfields fund managers Jonathon Jacobson and Richard Grubman wrote in a Feb. 11 letter to W. Alan McCollough, Circuit City’s chief executive officer.

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Also yesterday, Circuit City announced that Philip J. Schoonover, who spent about a decade at Best Buy before joining Circuit City last fall as chief merchandising officer, was named president of the company. McCollough, who previously held that title, will continue to serve as chairman and chief executive officer.

Shares of Circuit City soared $2.30, or 16.2 percent, to close at $16.53 yesterday.

Highfields’ offer of $17 per share was a premium of almost 20 percent over Circuit City’s closing price of $14.23 on Monday.

The hedge fund earlier won a reputation as a battler during its public confrontations with top managers at several firms, including Janus Capital and Reynolds Metals, which was acquired by Alcoa. And in 2001, then-Enron Chief Executive Jeffrey Skilling famously used an unprintable name to refer to Grubman after the fund manager complained about the company’s inability to produce a balance sheet.

With little debt and more than $750 million in cash, Circuit City has been considered ripe for takeover. About a decade ago, Circuit City was the nation’s largest chain of consumer-electronics stores. But Richfield, Minn.-based Best Buy overtook the retailer in the mid-1990s.

Highfields, which holds a 6.8 percent stake in Circuit City, made its offer after expressing dissatisfaction with the retailer’s lagging performance in a meeting last week with McCollough.

“Though some steps have been taken to address the company’s operating performance and suboptimal capital structure, we are nevertheless disappointed that management has been unable to move more aggressively,” the fund managers wrote in the letter to the company. “We attribute this partially to the demands and scrutiny that come with being a public company … and partially to the company’s historical inability to react to the increasing competitive nature of the business.”

Highfields officials did not return a telephone call yesterday seeking comment.