Film-Tech Forum ARCHIVE: Hollywood Boss Quits Amid Blockbuster Bid

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Posted by Thomas Procyk (Member # 1170) on 02-03-2005, 10:44 AM:

Hollywood Boss Quits Amid Blockbuster Bid

PORTLAND, Ore. - The head of Hollywood Entertainment Corp. abruptly resigned a day after Blockbuster Inc. announced a hostile bid of nearly $1 billion for its smaller movie rental rival, which has already agreed to be acquired for less by a third rental industry player, Movie Gallery Inc.

Hollywood Entertainment, which trails only Blockbuster in the U.S. movie rental business, said Thursday that founder Mark Wattles has resigned as its chief executive and chairman. The company didn't cite a reason for his departure in a brief news release.

F. Bruce Giesbrecht, Hollywood's president and chief operating officer, was named chief executive, but the company didn't name a replacement as chairman.

The personnel moves come a day after Dallas-based Blockbuster said Wednesday it would offer $14.50 per share in cash and stock for Hollywood, or about $985 million based on Hollywood's outstanding shares and options.

Hollywood agreed last month to a takeover by Movie Gallery, the nation's third-largest movie-rental company, which offered to pay $13.25 cash per share, or about $900 million. Both suitors would assume $350 million in Hollywood debt.

Hollywood shares rose 25 cents to $14.50 in morning trading on the Nasdaq Stock Market, while Blockbuster shares rose 17 cents to $9.57 on the New York Stock Exchange (news - web sites). Movie Gallery shares were down 34 cents at $20.91 on the Nasdaq.

In Thursday's statement, Hollywood said a special committee of its board was considering the offer from Blockbuster and would advise its shareholders of its recommendation by Feb. 17. The company urged shareholders to make no decision until then.

Hollywood, which is based in Wilsonville, Ore., has rejected Blockbuster's advances over the past several months, including an offer of $11.50 per share in cash. Blockbuster's new hostile tender offer would begin Friday and run through March 11 and consist of $11.50 in cash and $3 in its own stock for each Hollywood share.

Analysts said Movie Gallery, which is based in Dothan, Ala., could argue that its offer is still superior because Blockbuster might have more difficulty winning approval for a deal from antitrust regulators. Blockbuster said Wednesday it had received a request for more information on its proposal from the Federal Trade Commission.

"I'm sure Hollywood shareholders would have preferred all cash" from Blockbuster, said Arvind Bhatia, an analyst with Southwest Securities Inc. "I don't think this is the last word. There is more to come."

Dennis McAlpine, an analyst for McAlpine Associates, said Movie Gallery could counter Blockbuster's offer or hope that the FTC sinks Blockbuster's bid. "If I were a (Hollywood) shareholder, I'd sell," he said.

Officials for Movie Gallery did not return calls for comment.

A combination of Hollywood Entertainment and Movie Gallery would create a chain with about 4,500 stores and annual revenue of about $2.5 billion, still far behind Blockbuster, which has about 9,000 stores worldwide.

All three chains face growing competition from online movie-order services, including Netflix Inc. and Wal-Mart Stores Inc.
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Well, at least it's good that Blockbuster isn't taking over for now. Like people have said in the Late Fees thread, Blockbuster would probably re-brand all of the stores and sell off the library to make them stictly McDonaldized New-Release Only stores (yes, stores, as opposed to rental places) that let people keep the video.

Guess we'll have to see what happens Feb 17th, but it doesnt look good. [Frown]

=TMP=

Posted by Bobby Henderson (Member # 840) on 02-03-2005, 12:17 PM:

The possibility of late fee or not makes little difference to me. Blockbuster Video's selection of DVDs typically stinks. You have lots of copies of new releases, but damned near all of them in "fool screen" format. There's very little in the way of independent films, art films, music oriented DVDs, etc. But they'll stock the shelves with straight-to-video shit films with actors like Ben Gazarra, Lou Diamond Phillips and C. Thomas Howell.

Hollywood Video is pretty much the same deal. It makes no difference to me if the two merge. They basically have the same arguably lame concept: new releases for the lowest common denominator of the viewing public and movies for sale at or above retail MSRP pricing. Screw that.

I do all my DVD renting at Hastings. They carry a better selection of DVDs (including lots of art films, concert DVDs, foreign films, indie stuff along with all the new releases). The only thing where I have to fault Hastings is our local store's ridiculous way of stocking 2-disc rentals. They cram both discs into a single disc case and basically ruin the DVDs in a very short amount of time (if not immediately). If a movie comes out on 2 discs, sometimes I hold my nose and go to Hollywood Video. At least they do put a 2 disc title in a 2 disc case.

Posted by Michael Schaffer (Member # 1204) on 02-03-2005, 12:45 PM:

I have a Hollywood and a Blockbuster across the street from each other. The Holyywood store is much better. Most of the DVDs are actually WS and they have quite a bit of classic and foreign movies on DVD, and the genre shelves also hold a lot of older movies, plus they have a ton of older movies and documentaries on VHS.

Posted by David Stambaugh (Member # 1102) on 02-03-2005, 01:53 PM:

The Hollywood Video I go to has a pretty good mix of new and old. And they always have used lots of recent DVDs on sale at pretty good prices. No, they don't have every obscure title, but they're not just Top 100 either.

Posted by Adam Wilbert (Member # 1184) on 02-03-2005, 03:42 PM:

There is this little independent shop in town called "Film is Truth" that carries damn near everything. I rented a 30 minute short called "Night and Fog" last night, a documentary filmed in 1956 on Auschwitz, and Charlie Chaplin's "The Great Dictator".... both on DVD. try and find either of those at Blockbuster/Hollywood. I thank the lord everytime I rent something from that little place.

Posted by John Lasher (Member # 968) on 02-05-2005, 01:14 AM:

I just got a job at a Hollywood.