Blockbuster Corp. isn't afraid to take it up a notch. The company announced that it would make a hostile takeover bid for Hollywood Entertainment, Inc. if its directors continued to refuse negotiations with Blockbuster. Blockbuster is prepared to offer Hollywood's shareholders $11.50 per share in cash, which would amount to $700 million, plus an assumption of $300 million in debt. The takeover bid is scheduled to occur in mid-January and continues the battle between Blockbuster and Mark Wattles, Hollywood's chairman, and a Los Angeles investment firm who offered $10.25 per share.
Despite the flurry of news last year about the demise of the video rental industry and Viacom's efforts to jetison Blockbuster from its holdings, Blockbuster believes that its acquisition of Hollywood can help it compete in the changing video marketplace -- including Blockbuster's new on-line movie rental service. If it acquires Hollywood, Blockbuster will control 50% of the country's video rental stores. Hollywood's shares closed at $13.16 today, while Blockbuster's shares were down at $9.33/share.
Posted by franchiselawblog at December 28, 2004 05:02 PM