The move comes in the wake of Blockbuster's announced intention to buy all of Hollywood for about $985 million in cash and Blockbuster stock, which rivals the agreement struck last month by Alabama-based Movie Gallery to buy Hollywood for about $900 million in cash. Blockbuster's offer to buy Hollywood's debt expires at midnight Eastern time on March 11, the same deadline as the purchase offer for Hollywood's common stock. The debt offer is contingent on the stock purchase going through, among other things.

On Monday morning, Movie Gallery noted that regulatory clearance for its purchase deal with Hollywood seems to be in the bag, with the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. "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," said Page Todd, Movie Gallery's EVP and general counsel in a statement. "In contrast, we believe that Blockbuster's proposal poses significant regulatory risk, as more than 80% of Hollywood's stores are in the same local market as a Blockbuster store."

The Federal Trade Commission, under whose review authority acquisitions such as this fall, is still examining Blockbuster's offer.