The offer takes effect tomorrow and expires on March 11. By making a direct offer to the shareholders of Hollywood, Blockbuster seems to be trying an end-run around Hollywood's board of directors, which has spurned its offers in the past. In fact, in January, the board agreed to a different offer to buy Hollywood, from Alabama-based Movie Gallery for $13.25 per share in cash.

Blockbuster's persistence in seeking Hollywood is no surprise, since it publicly stated last month that the effort wasn't over, despite the agreement between Hollywood and Movie Gallery. The zeal with which Blockbuster is pursuing the deal, observers note, is probably because the company sees it as a way to shore itself up against increasing competition, such as the popular on-line DVD rental service Netflix.

Blockbuster Chairman and CEO, John Antioco, put it this way in a statement: "We believe this transaction... should better position Blockbuster to compete in the rapidly changing home entertainment marketplace. Additionally, by combining the companies' store distribution and brand portfolios, we plan to serve more customers..." None of the parties could be reached for comment late yesterday.