Blockbuster goes hostile on rival
Move to buy debt of video retailer
Video rental giant Blockbuster has begun hostile moves in its bid to take over rival Hollywood Entertainment.
Blockbuster has confirmed that it has approached Hollywood’s creditors to buy around $225m of its debt. Hollywood has already agreed a $900m offer from the third largest US video chain, Movie Gallery.
Blockbuster has already announced a $985m counter-offer, but Hollywood has continued to reject Blockbuster’s advances. By acquiring its rivals’ debt, Blockbuster hopes that it can scupper the Movie Gallery bid in favour of its own.
US regulator the Federal Trade Commission blocked a previous move by Blockbuster, in 1999, to acquire Hollywood, on competition grounds.
Blockbuster argues that the market has changed in the US with major retailers such as Wal-Mart and Target having a big presence in the DVD market, along with the rise of online players.
Blockbuster operates around 9,000 stores worldwide, while the combined Hollywood and Movie Gallery businesses would have 4,500 stores.
