Movie Gallery Courting Canadian Chain11 Dec, 2001 By: Hive News
Movie Gallery, the third largest video rentailer in the U.S., is making a play for 48-store Canadian chain VHQ Entertainment.
Shares of VHQ ceased trading on the Toronto Stock Exchange briefly Monday afternoon, but resumed higher Tuesday morning following the announcement that it received an unsolicited ``strong and immediate interest'' from Movie Gallery through its Canadian subsidiary Video Update Canada, to acquire all the goodwill and assets of VHQ's retail operations.
While VHQ Management indicates no formal bid has been made, Movie Gallery has requested further meetings ``to pursue and discuss a fair market value'' and conduct further due diligence on VHQ's retail operations.
Initial discussions suggest that a formal offer, if made, will likely be presented on an all-cash basis and will be subject to the completion of due diligence and the approval by the respective board of directors of both chains, a VHQ spokesperson said.