I buy the domain, now what?

Hi friends, i need some ideas here. I will appreciate any answers.

One of my competitors (small local niche market) go out of business and i just buy his domain name!
This domain have some decent backlinks, still rank on google and a pr2 pagerank.

Now i need some ideas what to do with this domain.
I read some articles and blog post and i think that there are two options:
1) Redirect this new domain to my main money domain (no 1 in google any way)
and
2) Make a new site (100% fresh content) on this new domain, repair the old backlinks, and send some backlinks from this domain to my main money domain (i have already do it with another competitor's domain).

What's your opinion?

Number 1 -
If it has no content on it GET SOME ON IT QUICK
Google understands TDNAM and domain transfer and resets it's metrics QUICK
If it goes to the site for more than a week or so and sees it's empty - your PR and authority can be set to zero and you might as well have bought another domain

After that - well get on and promote it.

Scritty

Thank you for your answer Scritty
So please comment on my plan:
-- I will go right now to "Internet Archive" website and try to recover and data available from the old site.
-- Create a website using this data on a separate IP server (not the same with my main money site)
-- Redirect to my main money website using 301

Sounds OK, or i plan to do it the wrong way?

Add privacy and get content on it, even if it is some crappy 150 word thing that you write.

Then redirect to your new site and monitor rankings for a month.

just make a meta redirect to your money site. people typing in the domain will be automatically redirected to you and you make the profits

Thank you all for the answers and the ideas, i will do it and i will report.
If there is anything else i have to take care please advice.

I've done this before. Bought a competitors website thatwent out of business and redirected it to my money site.

OK - Here is the report. I add the new domain to G**gl3 Webmaster Tools and i declare a 301 redirect to the old domain.
Then i go to the new domain CP and create a 301 redirect on .htaccess
Now when i type "newdomain.c*m" on my browser address bar i go to "old-domain.c*m"

The only problem was that i add some content on the "newdomain.c*m" and G**gl3 send his robot and record all the pages i create on "newdomain.c*m".
Then i go to "old-domain.c*m" CP and create some 301 redirects on root .htaccess and now all the links from "old-domain.c*m" redirect on different pages on my "old-domain.c*m".

I add some content on the "newdomain.c*m" since a few users give me this advice. Finally i realize that there is no reason to add much content just some content on the "index".