Blockbuster May Raise Offer for Hollywood Entertainment
DALLAS – Blockbuster Inc. (BBI), locked in a bidding war for Hollywood Entertainment Corp. (HLWY), announced Wednesday that it may sweeten its offer for the rival video renter.
Dallas-based Blockbuster, the leader in the movie rental industry, said in a statement it was willing to go above the $11.50-per-share offer made Nov. 11 to No. 2 Hollywood Entertainment. Blockbuster did not specify how far above its initial per-share offer it would go.
The initial offer had been valued at $700 million dollars.
But Blockbuster said Hollywood would have to deliver what it called "confirmatory information" requested from its rival. A Blockbuster statement said Hollywood was refusing to provide the information without an agreement not to tender an offer directly to Hollywood shareholders.
Blockbuster initially had offered about $700 million for its Wilsonville, Ore.-based rival on Nov. 11 in a bid to combine the two biggest players in the movie-rental industry.
Hollywood Entertainment is already in a deal to let its chairman and chief executive and Los Angeles buyout firm Leonard Green & Partners to take the company private. In August, the firm offered to buy Hollywood's roughly 60 million shares for $10.25 each. The deal, however, allowed Hollywood to solicit other bids, and the CEO said he welcomed Blockbuster's offer.
On Nov. 19, No. 3 video renter Movie Gallery Inc. (MOVI) said it had offered an undisclosed amount for Hollywood. And billionaire takeover specialist Carl Icahn's firms also have bought 5.1 million Hollywood shares in the last two weeks, representing an 8.4 percent stake in the video chain, according to papers filed with the Securities and Exchange Commission (search).
The move has fueled rumors that Icahn could be poised to enter the bidding war.
Blockbuster already has 9,000 outlets worldwide. Hollywood Video has more than 1,920 Hollywood Video stores and 600 Game Crazy specialty stores. Movie Gallery has more than 2,000 stores.