Hollywood Entertainment (NASDAQ:HLYW)
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Movie Gallery Issues Statement Regarding Its Pending Acquisition
of Hollywood Entertainment
DOTHAN, Ala., March 25 /PRNewswire-FirstCall/ -- Movie Gallery, Inc.
(NASDAQ:MOVI) today issued the following statement regarding Blockbuster's
(NYSE:BBI) announcement that its tender offer for Hollywood Entertainment
(NASDAQ:HLYW) has expired.
Joe Malugen, Chairman, President and Chief Executive Officer of Movie Gallery,
said, "We believe that Movie Gallery's definitive agreement to acquire
Hollywood is in the best interests of Hollywood's shareholders, employees, and
customers. Movie Gallery has already received regulatory approval and we look
forward to closing the Hollywood transaction promptly after the Hollywood
shareholder vote on April 22, 2005.
"Our combined company will be the second largest North American video rental
company with annual revenue of approximately $2.6 billion and approximately
4,500 stores located in all 50 U.S. states, Canada and Mexico. With a broader
geographic presence and greatly improved distribution capabilities and scale,
our combined company will be a strong competitor, well-positioned for continued
success in urban, suburban and rural markets," Mr. Malugen concluded.
Alston & Bird LLP and Axinn, Veltrop & Harkrider LLP acted as anti-trust legal
counsel to Movie Gallery.
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,
including over 200 stores in Canada. 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 2,
2005.
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.
Contacts: Financial
Thomas D. Johnson
Movie Gallery, Inc.
(334) 702-2400
Media
Andrew B. Siegel
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449 ext. 127
DATASOURCE: Movie Gallery, Inc.
CONTACT: Financial, Thomas D. Johnson of Movie Gallery, Inc.,
+1-334-702-2400; or Media, Andrew B. Siegel of Joele Frank, Wilkinson Brimmer
Katcher, +1-212-355-4449, ext. 127
Web site: http://www.moviegallery.com/