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DALLAS-Blockbuster Inc. officials say they may up their company’s bid, if needed, to acquire competitor Hollywood Entertainment. The country’s largest specialty movie retailer placed a $1 billion, $11.50 per share offer on the table for the owner of the Hollywood Video chain earlier this month.

Portland, OR-based Hollywood already is holding an agreement to be acquired by the private equity firm, Leonard Green & Partners, for $10.25 per share. That transaction originally was proposed in March at $14 per share, but Leonard Green lowered its bid last month because of “amended commitments” from its debt financing sources. On Nov. 19, Dothan, AL-based Movie Gallery put in an undisclosed offer for Hollywood.

Blockbuster officials say they must review “confirmatory information from Hollywood and Hollywood’s elimination of a standstill requirement currently preventing delivery of the information” before they will up their offer. The standstill agreement, according to Blockbuster, will not allow it to make a tender offer directly to Hollywood shareholders to buy the company.

“We believe that Blockbuster is positioned to provide the most value and best serve the interests of Hollywood’s shareholders,” says John Antioco, Blockbuster’s chairman and CEO, in a statement. “At this point, it appears that Blockbuster will not be able to receive the requested information from Hollywood unless and until the Leonard Green Partners transaction is modified to eliminate the requirement for a standstill agreement from Blockbuster, voted down by Hollywood’s shareholders or is otherwise terminated by Hollywood’s Board of Directors.”

Says a Blockbuster spokesperson: “We’re requesting the routine due diligence materials. We’re asking for the same information Hollywood is giving Leonard Green Partners.” Blockbuster officials have not made public whether or not they intend to keep the Hollywood Video name on the stores, if the deal goes through, the spokesperson says.

Hollywood Entertainment officials could not be reached for comment. Last month Viacom disposed of its majority ownership in Blockbuster, forcing the video retailer to take a charge of $1.5 billion during the third quarter when its same-store sales decreased 6.3% worldwide. Hollywood’s same-stores sales dropped 2% in the third quarter.

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