Locally based Blockbuster's exit ends a battle between the three top three US movie-rental chains. Blockbuster, the largest of the three with 9,000 units worldwide, first made an $11.50-per-share bid for Portland, OR-based Hollywood in November. Movie Gallery soon followed with an undisclosed bid.
In January, Hollywood executives agreed to a $13.25-per-share offer from Dothan, AL-based Movie Gallery. Blockbuster then upped its bid to the $14.50 per-share-mark. In its Q4 financial results conference call March 9, John Antioco, the locally based retailer's Chairman and CEO, said revealed that his firm was in talks with the FTC and would receive an opinion on the proposed takeover later this month.
Movie Gallery executives previously stated that they expect the Hollywood deal to close in the second quarter. The deal will give Movie Gallery about 2,000 Hollywood Video stores, bringing its total to 4,500 units in North America. Movie Gallery plans to keep the Hollywood Video name on stores as well as the company's Portland headquarters.
Entertainment analyst Dennis McAlpine says in a report that Movie Gallery has its work cut out for it. "Now it must lay out a plan of what it is going to do and then execute it," he says. "We expect that this acquisition will be a major plus for [Movie Gallery] but are somewhat concerned about any possible slips along the way of integration."
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