Movie Gallery to Buy Hollywood

DOTHAN, AL-Movie Gallery has apparently beaten out the largest movie rental chain in the country in the pursuit of competitor Hollywood Entertainment. The locally based retailer has entered an agreement to acquire Hollywood for about $1.2 billion, or $13.25 per share.

The deal will give Movie Gallery about 2,000 Hollywood Video stores, bringing its total to 4,500 units in North America. Company officials expect to close the deal in this year’s second quarter.

The transaction tops frontrunner Blockbuster Inc.’s offer to acquire Hollywood for $11.50 per share, as well as private equity firm Leonard Green & Partners’ $10.25 proposal, to which Portland, OR-based Hollywood had previously agreed.