March 25, 2005

Blockbuster ends hostile bid for Hollywood

Citing difficulties in getting regulatory approval in time, movie rental chain Blockbuster, Inc., is dropping its nearly $1 billion hostile bid to acquire Hollywood Entertainment Corp.

Blockbuster said in a news release that its offer, which values Hollywood shares at $14.50 in cash and stocks, expired at midnight and would not be renewed.

Hollywood has accepted an $850 million offer, or $13.25 per share, from smaller rival Movie Gallery Inc. The U.S. Federal Trade Commission has cleared that deal and is preparing to stop Blockbuster's bid in court because of antitrust concerns, sources told Reuters last week.

Blockbuster (NYSE: BBI) has about 9,000 stores worldwide. Hollywood (NASDAQ: HLYW) is a distant second to Blockbuster in the movie rental business; Movie Gallery (NASDAQ: MOVI) is No. 3.

In Louisville , Blockbuster has 15 stores in Louisville and Southern Indiana, and Hollywood operates 11 video rental stores.

Blockbuster said in a statement that it was not in its best interest to continue to pursue the Hollywood acquisition.

Post your own article or Blog on this article.