Hollywood Entertainment (NASDAQ:HLYW)
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Movie Gallery Announces Expiration of Hart-Scott-Rodino Waiting
Period
Planned Acquisition of Hollywood Entertainment Cleared by Federal Regulators
DOTHAN, Ala., Feb. 14 /PRNewswire-FirstCall/ -- Movie Gallery, Inc.
(NASDAQ:MOVI) today announced that the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) has expired,
indicating regulatory clearance of Movie Gallery's planned acquisition of
Hollywood Entertainment Corporation (NASDAQ:HLYW) effective February 11, 2005.
"We are pleased with this important development and we believe that the Movie
Gallery merger is the best option for Hollywood's shareholders, employees and
customers," said Page Todd, Executive Vice President and General Counsel of
Movie Gallery. "Clearing the pre-merger review process confirms what we have
said all along -- Movie Gallery stores do not have any substantial overlap with
Hollywood's stores and therefore pose no risk to competition. In contrast, we
believe that Blockbuster's proposal poses significant regulatory risk, as more
than 80 percent of Hollywood's stores are in the same local market as a
Blockbuster store."
"We are confident that our all-cash acquisition of Hollywood provides greater
closing certainty and will deliver concrete value to Hollywood shareholders
sooner than Blockbuster's highly conditional proposal," Todd concluded.
The company noted that Blockbuster's proposed exchange offer for Hollywood is
still under investigation by the Federal Trade Commission (FTC). Unlike Movie
Gallery, Blockbuster received a Request for Additional Information from the FTC
in connection with its proposed acquisition of Hollywood.
Since Blockbuster's proposal includes consideration in the form of Blockbuster
shares, under the HSR Act, it must wait an additional thirty days after it has
substantially complied with the FTC's Request for Additional Information before
it can move forward with its proposed offer unless either the FTC terminates
the waiting period or a court refuses to grant a permanent injunction.
As previously announced on January 10, 2005, Movie Gallery has entered into a
definitive merger agreement to acquire Hollywood for $13.25 per share in cash.
The closing of the transaction remains subject to other customary conditions,
including the approval of Hollywood's shareholders.
About Movie Gallery
Movie Gallery, Inc. is the third-largest company in the specialty video retail
industry based on revenues and the second-largest in the industry based on
stores. As of December 31, 2004, Movie Gallery owned and operated 2,482 stores
located primarily in the rural and secondary markets throughout North America.
Since the company's initial public offering in August 1994, Movie Gallery has
grown from 97 stores to its present size through acquisitions and new store
openings.
Forward-Looking Statements
This news release contains forward-looking statements relating to Movie
Gallery's intent to acquire Hollywood Entertainment. Specific forward-looking
statements relate to Movie Gallery's expectations regarding the potential
benefits of such transaction, including the anticipated benefits to Hollywood's
shareholders, employees and customers. These forward-looking statements are
based on Movie Gallery'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 Movie
Gallery's control. Certain statements made in this release are contingent upon
completion of the proposed transaction. Other factors that could cause actual
results to differ materially from the statements made in this release include,
among others: (i) matters related to closing conditions contained in the merger
agreement between Movie Gallery and Hollywood, including approval of the
Hollywood shareholders and conditions to the consummation of the financing
contemplated by the merger agreement; and (ii) other factors as described in
Movie Gallery's filings with the Securities and Exchange Commission, including
the detailed factors discussed under the heading "Cautionary Statements" in
Movie Gallery's annual report on Form 10-K for the fiscal year ended January 4,
2004.
HOLLYWOOD STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT
REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain a free copy
of the definitive proxy statement, as well as other filings containing
information about the parties, without charge, at the Securities and Exchange
Commission's Internet site (http://www.sec.gov/ ). Copies of the definitive
proxy statement and the filings with the SEC that will be incorporated by
reference in the proxy statement will also be available, without charge, by
directing a request to Hollywood Entertainment Corp., 9275 S.W. Peyton Lane,
Wilsonville, Oregon 97070, Attn: Investor Relations.
The directors and executive officers of Hollywood and other persons may be
deemed to be participants in the solicitation of proxies in respect of the
transaction. Information regarding Hollywood's directors and executive
officers will be available in the definitive proxy statement. Other
information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security holdings or
otherwise, will be contained in the definitive proxy statement and other
relevant materials to be filed with the SEC when they become available.
Contact: Financial: Thomas Johnson
(334) 702-2400
Media: Andrew Siegel
(212) 895-8627
DATASOURCE: Movie Gallery, Inc.
CONTACT: Financial - Thomas Johnson, +1-334-702-2400, or Media - Andrew
Siegel, +1-212-895-8627, both for Movie Gallery, Inc.
Web site: http://www.moviegallery.com/