After Hollywood Entertainment rejected Blockbuster’s offer, Movie Gallery issued a statement in response.
The statement is said:
We are pleased that Hollywood’s Board of Directors has rejected the exchange offer proposed by Blockbuster and reaffirmed its recommendation that Hollywood shareholders vote to approve the merger with Movie Gallery. We concur with its recommendations, and we continue to believe that our pending merger is the best option for Hollywood’s shareholders, employees and customers. Movie Gallery has already received regulatory approval to proceed with its acquisition of Hollywood, whereas Blockbuster’s proposed transaction remains the subject of an investigation by the Federal Trade Commission. For this reason, we believe that our all-cash acquisition of Hollywood offers greater closing certainty and will deliver concrete value to Hollywood shareholders.
Mr. Page Todd, Executive Vice President and General Counsel of Movie Gallery, added, “Blockbuster’s highly conditional proposal is predicated on an unrealistic and unsubstantiated market definition. Blockbuster has argued publicly that the competition is national in scope and that its competitors include mass merchants and new technologies. Movie Gallery is not aware of any instance in which a rentailer has shut down a store or been forced to lower prices due to a mass merchant opening in its market or the introduction of a subscription service or new cable offering. Furthermore, in the video-rental business the competition is very local in nature. It is perfectly obvious that Blockbuster’s closest competitor is Hollywood, not Wal- Mart, not Netflix, and not pay-per-view or video-on-demand, and for this reason we expect the FTC to obtain an injunction preventing Blockbuster from proceeding with its unsolicited hostile takeover attempt.”
Murdok | Breaking eBusiness News
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