Wattles Resigns From Hollywood3 Feb, 2005 By: Holly J. Wagner
Mark Wattles has resigned as chairman and CEO of Hollywood Entertainment Corp., just a day after Blockbuster launched a hostile offer that upped the ante for the nation's No. 2 rental chain.
Hollywood's board of directors appointed Hollywood president, COO and board member F. Bruce Giesbrecht to the CEO post. No replacement for the board chairman's position was named.
Wattles' eventual departure was widely expected to result from the sale of Hollywood, but the timing of the announcement amid a bidding war surprised observers. As bidding for Hollywood heated up in recent weeks, Wattles has increased his stake and his role in Ultimate Electronics, a 65-store hardware chain that recently went into bankruptcy.
Meanwhile Hollywood's board announced it would begin an exchange offer for the outstanding shares of Hollywood's stock, and that its special committee would consider Blockbuster's $14.50-per-share cash and stock offer and make a recommendation to shareholders by Feb 17. The committee might take no position on the offer, it warned in a statement, but in any case will disclose its reasoning when the announcement is made.
Hollywood requested in the statement that shareholders not make a determination whether to accept or reject the exchange offer until they have been advised as to Hollywood's position on the matter.
Until the Blockbuster offer was announced, the board had endorsed Movie Gallery's $13.25-per-share offer, which comprised cash and assumption of debt.