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Blockbuster Confirms Willingness to Increase Price for Hollywood
Entertainment Subject to Review of Confirmatory Information
Hollywood's Requirement for a Standstill Restriction as a Prerequisite to
Providing Confidential Information May Prevent Blockbuster From Increasing Its
Potential Acquisition Price
DALLAS, Dec. 1 /PRNewswire-FirstCall/ -- Blockbuster Inc. (NYSE:BBINYSE:
BBI.B) today confirmed its willingness to increase its potential acquisition
price for Hollywood Entertainment Corporation (NASDAQ:HLYW) above the $11.50
per share price previously communicated to Hollywood, subject to Blockbuster's
review of confirmatory information from Hollywood and Hollywood's elimination
of a standstill requirement currently preventing delivery of the information.
Even before any increase, Blockbuster's current expression of interest
represents a 12% premium over the value of Hollywood's current merger agreement
with Leonard Green Partners and its own Chairman and CEO, Mark Wattles.
In order to receive the requested information, Blockbuster has agreed to
execute a confidentiality agreement with Hollywood. However, Hollywood has
informed Blockbuster that under its existing $10.25 per share merger agreement
with Leonard Green Partners and Mr. Wattles it is prohibited from providing
such information unless Blockbuster agrees to standstill provisions that, among
other things, would prohibit Blockbuster from making a tender offer directly to
Hollywood's shareholders without the approval of Hollywood's Board of
Directors. Hollywood has already provided the information requested by
Blockbuster to Leonard Green Partners. Blockbuster does not believe it is in
the interests of either company's shareholders for Blockbuster to sign such an
agreement at this time.
"We believe that Blockbuster is positioned to provide the most value and best
serve the interests of Hollywood's shareholders," said John Antioco,
Blockbuster Chairman and CEO. "Unfortunately, we believe Hollywood's
requirement that Blockbuster's receipt of basic confirmatory information be
tied to standstill restrictions is depriving Hollywood shareholders of the
opportunity to potentially receive greater value for their shares."
Mr. Antioco continued, "At this point, it appears that Blockbuster will not be
able to receive the requested information from Hollywood unless and until the
Leonard Green Partners transaction is modified to eliminate the requirement for
a standstill agreement from Blockbuster, voted down by Hollywood's shareholders
or is otherwise terminated by Hollywood's Board of Directors. We call on
Hollywood's Board of Directors to act in the best interests of Hollywood's
shareholders."
THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER TO
BUY OR THE SOLICITATION OF AN OFFER TO SELL ANY SHARES. A SOLICITATION OR
OFFER TO BUY HOLLYWOOD'S COMMON STOCK MAY BE MADE, IF AT ALL, PURSUANT TO A
TENDER OFFER STATEMENT, AN OFFER TO PURCHASE AND RELATED MATERIALS. HOLLYWOOD
SHAREHOLDERS SHOULD READ THE TENDER OFFER STATEMENT, THE OFFER TO PURCHASE AND
ANY RELATED MATERIALS CAREFULLY BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF ANY OFFER. HOLLYWOOD
SHAREHOLDERS WILL BE ABLE TO OBTAIN THE TENDER OFFER STATEMENT, THE OFFER TO
PURCHASE AND RELATED MATERIALS WITH RESPECT TO ANY TENDER OFFER, IF APPLICABLE,
FREE AT THE SEC'S WEBSITE AT WWW.SEC.GOV OR FROM BLOCKBUSTER INC. AT
WWW.BLOCKBUSTER.COM .
IF A DEFINITIVE AGREEMENT IS SIGNED, HOLLYWOOD SHAREHOLDERS ARE URGED TO READ
THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES
AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. IF A DEFINITIVE
AGREEMENT IS SIGNED, HOLLYWOOD SHAREHOLDERS WILL BE ABLE TO OBTAIN A COPY OF
THE PROXY STATEMENT, AS WELL AS OTHER FILINGS CONTAINING INFORMATION ABOUT THE
PARTIES, FREE AT THE SEC'S WEBSITE AT WWW.SEC.GOV OR FROM HOLLYWOOD
ENTERTAINMENT CORPORATION AT WWW.HOLLYWOODVIDEO.COM .
This news release contains forward-looking statements relating to Blockbuster's
continued interest in a proposal to acquire Hollywood Entertainment Corporation
and its desire to receive and evaluate confirmatory information from Hollywood.
Specific forward-looking statements relate to Blockbuster's willingness to
increase its proposed acquisition price for Hollywood, the anticipated impact
of such transaction on Blockbuster's financial results and the anticipated
benefits to Blockbuster's and Hollywood's shareholders that could result from
the transaction. These forward-looking statements are based on Blockbuster's
current intent, expectations, estimates and projections and are not guarantees
of future performance. These statements involve risks, uncertainties,
assumptions and other factors that are difficult to predict and that could
cause actual results to vary materially from those expressed in or indicated by
them. In addition, some factors are beyond Blockbuster's control. Certain of
the statements made in this release are contingent upon the completion of the
proposed transaction discussed above and are subject to the execution of a
confidentiality agreement between Blockbuster and Hollywood, Blockbuster's
receipt and evaluation of the requested confirmatory information and the
execution of a definitive acquisition agreement or commencement and completion
of a tender offer. Blockbuster can give no assurance that a confidentiality
agreement will be executed between Blockbuster and Hollywood, it will receive
and evaluate the requested confirmatory information, a definitive agreement
will be executed or that a tender offer will be commenced or completed. Other
factors that could cause actual results to differ materially from the
statements made in this release include, among others: (i) Blockbuster's and
Hollywood's ability to receive all necessary approvals, including any necessary
governmental or regulatory approvals and the approval of the respective Board's
of Directors and stockholders, if applicable; (ii) changes to Blockbuster's
strategy, business plan and pricing model, including its plans regarding use of
capital and any related impact on Blockbuster's offer price; (iii) consumer
demand for Blockbuster's planned product and service offerings; (iv) the
variability in consumer appeal of the movie titles and games software released
for rental and sale; (v) Blockbuster's ability to respond to changing consumer
preferences and to effectively adjust its product mix, service offerings and
marketing and merchandising initiatives; (vi) Blockbuster's ability to timely
implement and maintain the necessary information technology systems and
infrastructure to support shifts in consumer preferences and any corresponding
changes to Blockbuster's operating model, including changes related to the
proposed transaction; (vii) the extent and timing of Blockbuster's continued
investment of incremental operating expenses and capital expenditures to
continue to develop and implement its initiatives; (viii) vendor determinations
relating to pricing and distribution of their product and Blockbuster's ability
to reach agreements with service, product and content providers on acceptable
commercial terms; and (ix) other factors as described in Blockbuster's filings
with the Securities and Exchange Commission, including the detailed factors
discussed under the heading "Cautionary Statements" in Blockbuster's annual
report on Form 10-K for the fiscal year ended December 31, 2003 and discussed
under the heading "Disclosure Regarding Forward-Looking Information" in
Blockbuster's quarterly report on Form 10-Q for the fiscal quarter ended
September 30, 2004.
DATASOURCE: Blockbuster Inc.
CONTACT: Press: Karen Raskopf, Senior Vice President, Corporate
Communications, +1-214-854-3190, or Randy Hargrove, Director, Corporate
Communications, +1-214-854-3190; Analysts/Investors: Mary Bell, Senior Vice
President, Investor Relations, +1-214-854-3863, all of Blockbuster Inc.
Web site: http://www.blockbuster.com/
http://www.hollywoodvideo.com/