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Blockbuster Inc. Commences Tender Offer and Consent Solicitation
for Hollywood Entertainment Corporation's 9.625% Senior Subordinated Notes Due
2011
DALLAS, Feb. 11 /PRNewswire-FirstCall/ -- Blockbuster Inc.
(NYSE:BBINYSE:BBI.B) today announced that, in connection with its previously
announced exchange offer for all of the outstanding shares of common stock of
Hollywood Entertainment Corporation (NASDAQ:HLYW), it is commencing an offer to
purchase for cash any and all of the $225.0 million principal amount of 9.625%
Senior Subordinated Notes due 2011 issued by Hollywood. Blockbuster is also
soliciting consents from the holders of the notes to approve certain amendments
to the indenture under which the notes were issued. The tender offer is
contingent on, among other things, the receipt of consents necessary to approve
such amendments to the indenture, at least a majority of the notes being
validly tendered and not withdrawn, the satisfaction or waiver of the
conditions to the exchange offer for Hollywood's common stock, and other
general conditions described in the offer to purchase.
The total consideration to be paid for each $1,000 principal amount of notes
tendered and accepted for payment will be determined on the 11th business day
preceding the expiration date of the offer, using the present value on the
expected payment date of the sum of $1,048.13 plus interest that would be paid
from the payment date through March 15, 2007. The present value will be
determined using the yield to maturity of the 2.25% U.S. Treasury Note due Feb.
15, 2007, plus a fixed spread of 75 basis points. The total consideration for
each note tendered includes a consent payment of $30.00 per $1,000 principal
amount of notes to holders who validly tender their notes and deliver their
consents prior to 5 p.m., New York City time, on the consent date, which will
be the later of (i) Feb. 25, 2005 or (ii) three business days following
Blockbuster's announcement of the termination of the Agreement and Plan of
Merger, dated Jan. 9, 2005, among Hollywood, Movie Gallery, Inc. and TG
Holdings, Inc. Holders who tender their notes on or prior to the consent date
may not withdraw or revoke their tender (except under certain limited
circumstances where required by law) after the consent date. Holders who
tender their notes after the consent date will not receive the consent payment.
The tender offer will expire at midnight, New York City time, on March 11,
2005, unless extended or earlier terminated. The consents being solicited will
eliminate substantially all of the restrictive covenants and certain events of
default in the indenture governing the notes. Information regarding the
pricing, tender and delivery procedures and conditions of the tender offer and
consent solicitation is contained in the Offer to Purchase and Consent
Solicitation Statement and the Consent and Letter of Transmittal, each dated
Feb. 11, 2005, and related documents.
Blockbuster has received a financial commitment from JPMorgan Chase Bank, N.A.,
Credit Suisse First Boston and Citicorp North America, Inc. for the funds
necessary to complete the tender offer.
Credit Suisse First Boston LLC (800-820-1653), Citigroup Global Markets Inc.
(800-558-3745) and JP Morgan Securities Inc. (866-834-4666) have been appointed
as dealer managers and solicitation agents for the tender offer and consent
solicitation. Morrow & Co., Inc. has been appointed the information agent and
Mellon Investor Services LLC has been appointed as the depositary for the
tender offer and consent solicitation. The Offer to Purchase and Consent
Solicitation Statement, the Consent and Letter of Transmittal and any
additional information concerning the terms and conditions of the tender offer
and consent solicitation may be obtained by contacting Morrow & Co., Inc., 445
Park Avenue, 5th Floor, New York, NY 10022, E-mail: . Noteholders please
call: (800) 654-2468.
This press release is not an offer to purchase, a solicitation of an offer to
purchase or a solicitation of consents with respect to Hollywood's 9.625%
Senior Subordinated Notes. The tender offer and consent solicitation is being
made solely by the Offer to Purchase and Consent Solicitation Statement dated
Feb. 11, 2005. In addition, this press release is neither an offer to purchase
nor a solicitation of an offer to sell any other securities, including
Hollywood common stock. Any exchange offer for Hollywood common stock will be
made only through a registration statement and related materials. In
connection with its previously announced exchange offer for Hollywood common
stock, Blockbuster has filed a registration statement on Form S-4 (containing a
prospectus) with the Securities and Exchange Commission. Investors and
security holders of Hollywood are advised to read these disclosure materials
(including other disclosure materials when they become available), because
these materials contain important information. Investors and security holders
may obtain a free copy of the disclosure materials and other documents related
to the exchange offer filed by Blockbuster with the Securities and Exchange
Commission at the SEC's website at http://www.sec.gov/ . The disclosure
materials and other documents related to the exchange offer and the tender
offer may also be obtained from Blockbuster upon request by directing such
request to Morrow & Co., Inc. in the manner described above.
This press release contains forward-looking statements relating to
Blockbuster's tender offer for all of Hollywood's 9.625% Senior Subordinated
Notes, its solicitation of consents from the holders of such notes and its
related expectations with regard to the offer and consent solicitation.
Specific forward-looking statements relate to (i) the terms and conditions of
the tender offer, including the timeframe for the offer, the consideration to
be paid in connection with the offer and consent solicitation, and the
conditions to consummation of the offer; and (ii) the source of funds for the
offer and consent solicitation. 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,
including the possible consummation of the announced merger between Hollywood
and Movie Gallery, Inc. Therefore, Blockbuster can give no assurance that the
proposed transactions will be completed or that the conditions to Blockbuster's
exchange offer for all of the shares of Hollywood's outstanding common stock or
the tender offer will be satisfied. Other factors that could cause actual
results to differ materially from the statements made in this release include,
among others: (i) the satisfaction, or waiver by Blockbuster, of any or all of
the conditions to the exchange offer for Hollywood common stock and/or the
tender offer; (ii) Blockbuster's ability to provide the necessary information
and to take such actions as are necessary to comply with the Federal Trade
Commission's requests of it and to clear the Hart-Scott-Rodino process with
respect to the exchange offer for Hollywood common stock; (iii) Blockbuster's
and Hollywood's ability to receive any and all other necessary approvals,
including any other necessary governmental or regulatory approvals and the
approval of the respective Boards of Directors and stockholders, if applicable;
(iv) Blockbuster's ability to close the financings necessary for the proposed
exchange offer for Hollywood common stock and tender offer and consent
solicitation; and (v) other factors as described in filings with the Securities
and Exchange Commission, including the detailed factors discussed under the
headings "Risk Factors" in Blockbuster's prospectus included in its
registration statement on Form S-4 as filed with the Securities and Exchange
Commission on February 2, 2005, "Cautionary Statements" in Blockbuster's annual
report on Form 10-K for the fiscal year ended December 31, 2003 and "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, or Randy Hargrove, Senior Director, Corporate Communications,
+1-214-854-3190, or analysts-investors, Mary Bell, Senior Vice President,
Investor Relations, +1-214-854-3863, or Angelika Torres, Director, Investor
Relations, +1-214-854-4279, all of Blockbuster Inc.
Web site: http://www.sec.gov/
Web site: http://www.blockbuster.com/