Hollywood Board Expresses No Opinion and Remains Neutral Toward Blockbuster's Unsolicited Debt Tender Offer
25 Febbraio 2005 - 1:30PM
PR Newswire (US)
Hollywood Board Expresses No Opinion and Remains Neutral Toward
Blockbuster's Unsolicited Debt Tender Offer PORTLAND, Ore., Feb. 25
/PRNewswire-FirstCall/ -- Hollywood Entertainment Corporation
(NASDAQ:HLYW) announced today that its Board of Directors
unanimously expressed no opinion and remained neutral toward the
unsolicited offer by Blockbuster Inc. (NYSE:BBI) to purchase all of
Hollywood's outstanding 9.625% Senior Subordinated Notes due 2011
and the related consent solicitation. The Board arrived at this
position after receiving the unanimous recommendation of a Special
Committee of independent directors, which considered the facts and
circumstances surrounding Blockbuster's unsolicited note tender
offer. Because the Board owes fiduciary duties to Hollywood's
shareholders, who may be affected by a noteholder's decision to
tender or not to tender notes, and owes no fiduciary duties to
Hollywood's noteholders, the Board and Special Committee concluded
it would not be appropriate to provide a recommendation as to
whether noteholders should tender notes. The Board, however,
strongly urged Hollywood's noteholders to carefully consider all
aspects of Blockbuster's offer before deciding for themselves
whether to tender. Among the factors the Board and the Special
Committee considered and which noteholders should be aware of in
making their determination are: -- under the terms of Blockbuster's
note tender offer, holders who tender will not be permitted to
withdraw or revoke their tender, leaving them unable to tender in
response to a more attractive offer; -- Blockbuster's unsolicited
note tender offer is subject to a number of conditions, including
the satisfaction or waiver of the conditions to Blockbuster's
February 4, 2005 unsolicited offer to purchase Hollywood's common
stock; -- Blockbuster's unsolicited common stock tender offer is
itself subject to numerous conditions which reduce the likelihood
of the transaction being completed. Because Blockbuster's note
tender offer is conditioned upon the satisfaction or waiver of the
conditions to Blockbuster's common stock tender offer, the note
tender offer is equally as unlikely to be completed, unless these
conditions are waived for the note tender offer; and -- the Board
and Special Committee have previously recommended that Hollywood's
shareholders reject Blockbuster's unsolicited common stock tender
offer, in part due to the numerous conditions which reduce the
likelihood that the transaction will be completed. The factors
considered by the Board and the Special Committee in arriving at
this conclusion are included in a Solicitation/Recommendation
Statement on Schedule 14D-9 that was filed with the Securities and
Exchange Commission on February 17, 2005. The announcements
contained in this press release were made pursuant to Hollywood's
obligations under Rule 14e-2 under the Securities Exchange Act of
1934. UBS Investment Bank and Lazard provided financial advice to
the Special Committee in connection with these matters. Gibson,
Dunn & Crutcher LLP provided legal advice to the Special
Committee and Stoel Rives LLP provided legal advice to Hollywood in
connection with these matters. Recommendation on Blockbuster's
Common Stock Tender Offer Remains Unchanged The determination of
the Board announced today does not change the recommendation of the
Board that shareholders reject Blockbuster's unsolicited common
stock tender offer announced on February 17, 2005. Additional
Information The proxy statement relating to Movie Gallery's
acquisition of Hollywood that Hollywood plans to file with the
Securities and Exchange Commission and mail to its shareholders
will contain information about Hollywood, Movie Gallery, the
proposed merger and related matters. Shareholders are urged to read
the proxy statement carefully when it is available, as it will
contain important information that shareholders should consider
before making a decision about the merger. In addition to receiving
the proxy statement and a white proxy card from Hollywood by mail,
shareholders will also be able to obtain the proxy statement, as
well as other filings containing information about Hollywood,
without charge, from the SEC's website (http://www.sec.gov/) or,
without charge, from Hollywood. The proxy statement will also be
available from MacKenzie Partners, Inc. by calling (800) 322-2885
toll-free or by email request to: . This announcement is neither a
solicitation of proxy, an offer to purchase nor a solicitation of
an offer to sell shares of Hollywood. Hollywood and its executive
officers and directors may be deemed to be participants in the
solicitation of proxies from Hollywood's shareholders with respect
to the proposed merger. Information regarding any interests that
Hollywood's executive officers and directors may have in the
transaction with Movie Gallery will be set forth in the proxy
statement. DATASOURCE: Hollywood Entertainment Corporation CONTACT:
Daniel Burch, +1-212-929-5748, Larry Dennedy, +1-212-929-5239, or
Bob Marese +1-212-929-5405, all for Hollywood
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