Blockbuster Inc. to Commence Exchange Offer for Hollywood Entertainment at $14.50 Per Share
02 Febbraio 2005 - 11:37PM
PR Newswire (US)
Blockbuster Inc. to Commence Exchange Offer for Hollywood
Entertainment at $14.50 Per Share DALLAS, Feb. 2
/PRNewswire-FirstCall/ -- Blockbuster Inc. (NYSE:BBINYSE:BBI.B)
today announced that it has filed a registration statement with the
Securities and Exchange Commission for an exchange offer for all
outstanding shares of Hollywood Entertainment Corporation
(NASDAQ:HLYW) at a value of $14.50 per share, comprised of $11.50
in cash and $3.00 in Blockbuster class A common stock. The exchange
offer will formally commence on Feb. 4, 2005. The proposed
transaction would have an estimated total value of more than $1.3
billion and would be immediately accretive to Blockbuster's
earnings per share and cash flow. The exchange offer represents a
premium of $1.25 per Hollywood share, or 9.4%, over the value of
Movie Gallery's $13.25 cash offer for each share of Hollywood
common stock. Following completion of the exchange offer,
Blockbuster intends to consummate a second step merger in which
each remaining Hollywood shareholder would receive the right to the
same consideration in cash and stock as paid in the exchange offer.
John Antioco, Blockbuster Chairman and CEO, said, "We believe this
transaction will provide tremendous value to both Blockbuster and
Hollywood shareholders and 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 in more ways than
ever before." As previously announced, as is common in transactions
of this nature, Blockbuster has received a request for additional
information from the Federal Trade Commission under the
Hart-Scott-Rodino Regulatory Improvements Act of 1976 (HSR Act) in
connection with its proposed acquisition of Hollywood. Blockbuster
is devoting significant resources to complying with this request
and anticipates that it will complete its response and file its
compliance certificate by the end of the week. Blockbuster remains
optimistic that it will complete the HSR Act process shortly. The
exchange offer is conditioned upon, among other things, the
expiration or termination of the appropriate waiting period under
the HSR Act; the registration statement for the issuance of
Blockbuster shares in the exchange offer being declared effective
by the Securities and Exchange Commission; a majority of Hollywood
shares being validly tendered in the exchange offer and not
withdrawn; at least a majority in principal amount of Hollywood's
existing public notes being validly tendered in a separate tender
offer to be commenced by Blockbuster; Blockbuster being satisfied
that the Oregon anti-takeover statutes will not be applicable; the
receipt of funds under Blockbuster's financing arrangements that
are being put in place for the exchange offer; the termination of
the Movie Gallery merger agreement with Hollywood with no amount
payable to Movie Gallery other than the break-up fees and expense
reimbursement provided in the Movie Gallery merger agreement; and
the satisfaction of certain conditions, including those relating to
the financial condition of Hollywood, that are currently included
in the Movie Gallery merger agreement. The complete terms and
conditions of the exchange offer are set forth in the offering
documents filed today with the Securities and Exchange Commission.
The exchange offer is scheduled to expire at 12:00 midnight, New
York City time, on March 11, 2005, unless extended. Citigroup
Global Markets Inc., Credit Suisse First Boston LLC and J.P. Morgan
Securities Inc. are acting as Dealer Managers for the exchange
offer and Morrow & Co., Inc. is acting as Information Agent.
Blockbuster has received a financing commitment from JPMorgan Chase
Bank, N.A., Credit Suisse First Boston and Citicorp North America,
Inc. for the funds necessary to complete the exchange offer, as
described. This press release is neither an offer to purchase nor a
solicitation of an offer to sell any securities. Any exchange offer
will be made only through a registration statement and related
materials. In connection with the exchange offer, Blockbuster has
filed a registration statement on Form S-4 (containing a
prospectus) with the Securities and Exchange Commission. Investors
and security holders of Hollywood are advised to read these
disclosure materials (including other disclosure materials when
they become available), because these materials contain important
information. Investors and security holders may obtain a free copy
of the disclosure materials and other documents filed by
Blockbuster with the Securities and Exchange Commission at the
SEC's website at http://www.sec.gov/ . The disclosure materials and
other documents of Blockbuster may also be obtained from
Blockbuster upon request by directing such request to the
Information Agent, Morrow & Co., Inc., 445 Park Avenue, 5th
Floor, New York, NY 10022, E-mail: . Banks and brokerage firms
please call: (800) 654-2468. Shareholders please call: (800)
607-0088. This release contains forward-looking statements relating
to Blockbuster Inc.'s commencement of an exchange offer for all of
the shares of Hollywood Entertainment Corporation common stock and
Blockbuster's expectations with regard to the proposed transaction.
Specific forward-looking statements relate to (i) the terms and
conditions of the exchange offer; (ii) the anticipated impact of
the transaction on Blockbuster's financial and operational results;
(iii) the anticipated benefits to Blockbuster's and Hollywood's
shareholders that could result from the transaction; (iv) the
anticipated second-step merger; and (v) Blockbuster's expectations
as to the timing of its completion of the Hart-Scott-Rodino process
and as to its ability to substantially comply with the related
second request from the Federal Trade Commission. These
forward-looking statements are based on Blockbuster's current
intent, expectations, estimates and projections and are not
guarantees of future performance. These statements involve risks,
uncertainties, assumptions and other factors that are difficult to
predict and that could cause actual results to vary materially from
those expressed in or indicated by them. In addition, some factors
are beyond Blockbuster's control, including the possible
consummation of the announced merger between Hollywood and Movie
Gallery, Inc. Therefore, Blockbuster can give no assurance that the
proposed transaction will be completed or that the conditions to
the exchange offer will be satisfied. Other factors that could
cause actual results to differ materially from the statements made
in this release include, among others: (i) the satisfaction, or
waiver by Blockbuster, of all conditions to the exchange offer;
(ii) Blockbuster's ability to provide the necessary information and
to take such actions as are necessary to comply with the Federal
Trade Commission's requests of it and to clear the Hart-
Scott-Rodino process; (iii) Blockbuster's and Hollywood's ability
to receive any and all other necessary approvals, including any
other necessary governmental or regulatory approvals and the
approval of the respective Boards of Directors and stockholders, if
applicable; (iv) Blockbuster's ability to close the financings
necessary for the proposed acquisition; (v) Blockbuster's ability
to successfully integrate Hollywood's operations with its own upon
completion of the proposed acquisition; and (vi) other factors as
described in filings with the Securities and Exchange Commission,
including the detailed factors discussed under the headings "Risk
Factors" in Blockbuster's prospectus included in its registration
statement on Form S-4 as filed with the Securities and Exchange
Commission on February 2, 2005, "Cautionary Statements" in
Blockbuster's annual report on Form 10-K for the fiscal year ended
December 31, 2003 and "Disclosure Regarding Forward-Looking
Information" in Blockbuster's quarterly report on Form 10-Q for the
fiscal quarter ended September 30, 2004. DATASOURCE: Blockbuster
Inc. CONTACT: press, Karen Raskopf, Senior Vice President,
Corporate Communications, +1-214-854-3190, or Randy Hargrove,
Senior Director, Corporate Communications, +1-214-854-3190, or
analysts-investors, Mary Bell, Senior Vice President, Investor
Relations, +1-214-854-3863, or Angelika Torres, Director, Investor
Relations, +1-214-854-4279, all of Blockbuster Inc. Web site:
http://www.sec.gov/ Web site: http://www.blockbuster.com/
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