Hollywood Entertainment ( HLYW) surged 28% Monday after a management-led group said it would take the video retailer private in an $840 million cash deal. The Portland, Ore., company said it would sell itself to a group led by Los Angeles investment banker Leonard Green & Partners for $14 a share. Hollywood Chairman Mark Wattles will own half the common equity in the reconstituted company. Hollywood runs more than 1,920 Hollywood Video superstores and 600 Game Crazy specialty stores. The news comes as the video-rental industry undergoes sweeping change wrought by increasing competition. Outfits like Hollywood and sector giant Blockbuster ( BBI) have been pressed by the spreading popularity of digital video disks and the mail-order rental business run by upstarts like Netflix ( NFLX). Blockbuster parent Viacom ( VIA.B) recently rolled out plans to spin the chain off to shareholders in response to changing sectorwide economics. Hollywood shares rose $3 to $13.70.