dropped its hostile takeover campaign for
Friday, leaving the 1,900-store video rental chain in the friendly hands of
Hollywood, the country's No. 2 rental outfit, agreed in January to be acquired by Movie Gallery for $13.25 a share in cash. While Blockbuster's cash-and-stock bid was higher at $14.50 a share, the offer faced probable government antitrust opposition. Movie Gallery previously received antitrust clearance.
"Our decision not to extend our offers was reached after a careful review of all of the available facts and circumstances," Blockbuster said. "Among those things that played prominently for us were Hollywood's recent public filings and the unlikely resolution of our request for regulatory clearance on an acceptable timetable.
"Given the current circumstances, in our judgment it is not in Blockbuster's best interest to continue to pursue the acquisition," the company said.
Hollywood's shares closed Thursday at $14.13.
Blockbuster allowed its tender offer to expire last night and said it will return all shares it received.