Hollywood Entertainment (NASDAQ:HLYW)
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Blockbuster Remains Committed to Pursuing Acquisition of
Hollywood
Company remains optimistic it will complete the Hart-Scott-Rodino process on or
before the end of February
DALLAS, Jan. 18 /PRNewswire-FirstCall/ -- Blockbuster Inc. (NYSE:BBI) today
announced that it remains committed to pursuing an acquisition of Hollywood
Entertainment Corporation (NASDAQ:HLYW) in spite of the recent announcement of
the entry into a definitive merger agreement by Hollywood and Movie Gallery,
Inc. (NASDAQ:MOVI).
"We are disappointed that the special committee of Hollywood's board of
directors elected to enter into a merger agreement with Movie Gallery without
giving Blockbuster a fair opportunity to participate in the auction process,"
said John Antioco, Blockbuster Chairman and CEO. "While it no longer makes
sense at this time for Blockbuster to commence a tender offer at $11.50 per
share in light of the Movie Gallery agreement, we are evaluating the price that
Blockbuster would be willing to offer for Hollywood in light of various
factors, including the termination fee to Movie Gallery that is included in the
merger agreement."
Blockbuster also announced that, as is common in transactions of this nature,
it has received a request for additional information from the Federal Trade
Commission under the Hart-Scott-Rodino Regulatory Improvements Act of 1976 in
connection with its proposed acquisition of Hollywood. Blockbuster is devoting
significant resources to complying with this request and anticipates that it
will be in substantial compliance with the request by the first week of
February. Blockbuster remains optimistic that it will complete the
Hart-Scott-Rodino process by the end of February, if not earlier.
This release contains forward-looking statements relating to Blockbuster's
continued interest in acquiring Hollywood Entertainment Corporation and its
expectations with regard to the completion of the related Hart-Scott-Rodino
process. Specific forward-looking statements relate to (i) Blockbuster's
commitment to pursuing an acquisition of Hollywood in spite of the recent
announcement of the entry into a definitive merger agreement by Hollywood and
Movie Gallery, Inc.; (ii) Blockbuster's evaluation of the price it would be
willing to pay for such acquisition and (iii) Blockbuster's expectations as to
the timing of its completion of the Hart-Scott-Rodino process and as to its
ability to substantially comply with the related second request from the
Federal Trade Commission. 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 recently announced merger between
Hollywood and Movie Gallery, Inc. Therefore, Blockbuster can give no assurance
that the proposed transaction will be completed or that the conditions to any
tender offer Blockbuster may commence will be satisfied. Other factors that
could cause actual results to differ materially from the statements made in
this release include, among others: (i) 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; (ii) 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; (iii) Blockbuster's ability to close the financing
necessary for the proposed acquisition; (iv) the ability of Blockbuster and
Hollywood to negotiate and enter into a confidentiality agreement on terms
satisfactory to both parties; (v) the results of Blockbuster's review of
Hollywood information if it is provided access to such information; (vi)
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; and (vii) other factors as described in 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.
THIS IS NOT AN OFFER TO BUY OR THE SOLICITATION OF AN OFFER TO SELL ANY SHARES.
A TENDER 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 WHEN THEY BECOME
AVAILABLE 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
http://www.sec.gov/ OR FROM BLOCKBUSTER INC. AT http://www.blockbuster.com/.
HOLLYWOOD SHAREHOLDERS ARE URGED TO READ ANY PROXY STATEMENT REGARDING THE
PROPOSED TRANSACTION IF AND WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. BLOCKBUSTER AND ITS DIRECTORS AND EXECUTIVE OFFICERS
MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES IN RESPECT OF
THE PROPOSED TRANSACTION BETWEEN HOLLYWOOD AND BLOCKBUSTER. HOLLYWOOD
SHAREHOLDERS WILL BE ABLE TO OBTAIN A COPY OF ANY PROXY STATEMENT, AS WELL AS
OTHER FILINGS CONTAINING INFORMATION ABOUT THE PARTIES (INCLUDING INFORMATION
REGARDING THE PARTICIPANTS IN THE PROXY SOLICITATION AND A DESCRIPTION OF THEIR
DIRECT AND INDIRECT INTERESTS, BY SECURITY HOLDINGS OR OTHERWISE), FREE AT THE
SEC'S WEBSITE AT http://www.sec.gov/, FROM BLOCKBUSTER INC. AT
http://www.blockbuster.com/ OR FROM HOLLYWOOD ENTERTAINMENT CORPORATION AT
http://www.hollywoodvideo.com/.
DATASOURCE: Blockbuster Inc.
CONTACT: Press, Karen Raskopf, Senior Vice President, Corporate
Communications, +1-214-854-3190, or Randy Hargrove, Director, Corporation
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.blockbuster.com/
http://www.hollywoodvideo.com/