Dallas, Blockbuster is prepared to spend more to acquire Hollywood Entertainment Corp. Dallas-based Blockbuster confirmed its willingness to rise above the $11.50 per share price previously offered. The higher bid is subject to Blockbuster's review of certain "confirmatory information" about Hollywood Entertainment.
Blockbuster is seeking to sign a confidentiality agreement with Hollywood Entertainment in order to receive the company's information, but there's a catch. Hollywood Entertainment has an existing $10.25 per share merger agreement with Leonard Green Partners that prevents that kind of information sharing.
Even before any increase, Blockbuster's current expression of interest represents a 12% premium over the value of Hollywood Entertainment's current merger agreement, Blockbuster said.
"We believe that Blockbuster is positioned to provide the most value and best serve the interests of Hollywood's shareholders," said John Antioco, Blockbuster chairman and CEO. "Unfortunately, we believe Hollywood's requirement that Blockbuster's receipt of basic confirmatory information be tied to standstill restrictions is depriving Hollywood shareholders of the opportunity to potentially receive greater value for their shares."
Mr. Antioco continued: "At this point, it appears that Blockbuster will not be able to receive the requested information from Hollywood unless and until the Leonard Green Partners transaction is modified to eliminate the requirement for a standstill agreement from Blockbuster, voted down by Hollywood's shareholders or is otherwise terminated by Hollywood's board of directors. We call on Hollywood's board of directors to act in the best interests of Hollywood's shareholders."