Blockbuster drops Hollywood bid
Rental giant admits defeat
Blockbuster has dropped its hostile bid for rival Hollywood Entertainment.
The world’s biggest video rental operator said its offer to acquire Hollywood shares at $14.50 each in cash and stock had expired.
John Antioco, Blockbuster chairman and CEO, said: “Our decision not to extend our offers was reached after a careful review of all of the available facts and circumstances.
“Among those things that played prominently for us were Hollywood’s recent public filings and the unlikely resolution of our request for regulatory clearance on an acceptable timetable. Given the current circumstances, in our judgment it is not in Blockbuster’s best interest to continue to pursue the acquisition.”
Blockbuster, which had already made one unsuccessful move for Hollywood, made its counterbid after Hollywood agreed a takeover by Movie Gallery. That deal, which will now go ahead, brings together the number two and number three video chains in the US market. That in turn will further increase the competition for Blockbuster in a sector where online rentals and DVD sales by general merchandise retailers are growing fast.
Earlier this month, US regulator the Federal Trade Commission, which has already approved the Hollywood/Movie Gallery deal, filed a court motion to halt Blockbuster’s bid. The FTC said Blockbuster has provided “insufficient and inaccurate” details about its plans.
