The jousting for video-rental chain
intensified Tuesday as suitor
promised to take its hostile takeover bid straight to public shareholders.
Blockbuster, which has had its friendly overtures for Hollywood blocked by managers who are trying to take the company private, said it would start a cash tender for Hollywood shares at $11.50 each in mid-January. Blockbuster said the offer would commence in the event no friendly takeover agreement is reached.
Blockbuster also repeated that it might be willing to raise its offer if Hollywood would turn over its books, a request management previously declined. According to Blockbuster, Hollywood has requested a guarantee that no hostile takeover offer is forthcoming before detailing its financial condition.
Tuesday's threat by Blockbuster is the latest chapter in an increasingly contentious battle for Hollywood, which previously agreed to be taken private at $10.25 a share by investors including chairman Mark Wattles. In mid-December, billionaire investor Carl Icahn announced that he was the largest single shareholder in both firms and said Hollywood should be sold to Blockbuster.
Hollywood shares fell 24 cents, or 1.8%, to $12.85 in premarket Instinet trading Tuesday.
"We believe that the proposal Blockbuster is prepared to make is clearly in the best interests of Hollywood and Blockbuster shareholders as well as consumers," Blockbuster said. "Additionally, as we have said before, we believe the proposed transaction will better position Blockbuster to compete in the rapidly changing home entertainment marketplace."