Blockbuster Offers to Buy Hollywood Long-Term Debt11 Feb, 2005 By: Holly J. Wagner
Blockbuster took the next step toward a hostile takeover of Hollywood Video today with an offer to buy up $225 million of Hollywood’s long-term debt.
Blockbuster launched an offer to pay cash for any or all of the $225 million principal amount of Hollywood’s senior subordinated notes due 2011.
Big Blue is also soliciting note holders’ consent to approve amendments to the terms of the debt.
The offer expires March 11, the same date Blockbuster set to close its offer to Hollywood shareholders to buy their shares on the open market for $11.50 each in cash plus $3 worth of Blockbuster stock.
Both maneuvers are part of an effort to buy Hollywood out from under Movie Gallery, which has offered $13.25 per share in cash to buy Hollywood.
Hollywood’s board of directors has not endorsed an offer since rejecting a much lower bid from former CEO Mark Wattles and Leonard Green & Partners. The board has announced that shareholders as of Feb. 16 will be eligible to vote on the Movie Gallery proposal, and set Feb. 17 as the date to announce whether or not the board will back that offer.