Retailer Hollywood Entertainment agrees to $840 million buyout

PORTLAND, Ore. (AP) _ Video retailer Hollywood Entertainment Corp. has agreed to a buyout offer of about $840 million from a group led by a Los Angeles-based investment firm. <br><br>The deal announced

Monday, March 29th 2004, 12:00 am

By: News On 6

PORTLAND, Ore. (AP) _ Video retailer Hollywood Entertainment Corp. has agreed to a buyout offer of about $840 million from a group led by a Los Angeles-based investment firm.

The deal announced Monday comes as video retailers like Hollywood Entertainment and its bigger rival Blockbuster Inc. have come under pressure from video sales by discounters such as Wal-Mart Stores Inc. and Target Corp. New technology is also making movies instantly available over the Internet or through cable services.

Portland-based Hollywood Entertainment currently owns and operates more than 1,920 Hollywood Video superstores and 600 Game Crazy specialty stores.

The proposed buyer is a group led by Leonard Green & Partners, a private investment firm specializing in buyouts. Its holdings include stakes in PetCo, Rand McNally, The Sports Authority and Rite Aid.

The deal is subject to shareholder approval, antitrust clearance and the completion of financing.

Mark Wattles, Hollywood's founder, chairman and chief executive, will continue in his current capacities following the merger. The announcement said he gets 50 percent of the common equity in the surviving company.

Under terms of the deal, Hollywood's shareholders would receive $14.00 per share in cash. That reprsents a nearly 31 percent premium over the company's closing price of $10.70 on Friday.