Blockbuster Drops Hollywood Bid25 Mar, 2005 By: Erik Gruenwedel
Blockbuster today declined to renew its $14.50-per-share takeover bid for perennial rival Hollywood Video.
Citing recent Hollywood filings with the Securities and Exchange Commission and ongoing investigations from the Federal Trade Commission over antitrust issues, John Antioco, Blockbuster chairman and CEO, threw in the towel.
“Our decision not to extend our offers was reached after a careful review of all of the available facts and circumstances,” Antioco said. “Given the current circumstances, in our judgment it is not in Blockbuster's best interest to continue to pursue the acquisition.”
The decision clears the way for Movie Gallery's $13.25-per-share bid, which has been approved by the Hollywood board of directors.
Joe Malugen, Movie Gallery chairman, president and CEO, said the company's definitive agreement to acquire Hollywood is in the best interest of Hollywood's shareholders, employees and customers.
“We look forward to closing the transaction promptly after the Hollywood shareholder vote April 22,” Malugen said.
The move didn't surprise retail analyst Dennis McAlpine of McAlpine Associates, Scarsdale, N.Y.“It was just a matter of when they did it,” McAlpine said. “It would have cost them a lot of money to go fight a suit with the FTC. There were just too many challenges.”