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Hollywood Entertainment Corporation Signs Definitive Merger Agreement;
Shareholders to Receive $14.00 per Share in Cash
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XXXXXXXX, XX, March 29, 2004 -- Hollywood Entertainment Corporation (Nasdaq:
HLYW), owner and operator of more than 1,920 Hollywood Video superstores and
600 Game Crazy specialty stores, today announced the signing of a definitive
merger agreement with an affiliate of Xxxxxxx Xxxxx & Partners, L.P.
Under the terms of the merger agreement, upon consummation, Hollywood's
shareholders will receive $14.00 per share in cash, which represents a
premium of more than 30% to the most recent closing price and a premium of
more than 25% to the average trading price for the last 30 days. Xxxx
Xxxxxxx, Hollywood's Founder, Chairman and Chief Executive Officer will
continue in his current capacities following the merger. Xx. Xxxxxxx will
exchange a substantial portion of his equity holdings in Hollywood for 50% of
the common equity in the surviving company.
The Company entered into the merger agreement following the unanimous
recommendation by a special committee comprised of the independent directors
of the company's Board of Directors (the "Special Committee"). The Special
Committee and the Board of Directors received a fairness opinion from Lazard.
The closing of the transaction is subject to certain terms and conditions
customary for transactions of this type, including shareholder approval,
receipt of antitrust clearance and the completion of financing. The Company
will solicit shareholder approval by means of a proxy statement, which will
be mailed to Hollywood shareholders upon the completion of the required
Securities and Exchange Commission filing and review process. The parties
currently anticipate consummating the transaction in the third calendar
quarter of 2004. The equity financing necessary for the transaction has been
fully committed by Xxxxxxx Xxxxx & Partners, L.P., through Green Equity
Investors IV, L.P., a $1.85 billion private equity fund, and the debt
financing necessary for the transaction has been fully committed by UBS AG.
Xxxxxxx Xxxxx & Partners is a private Los Angeles-based merchant banking firm
specializing in organizing, structuring and sponsoring management buy-outs,
going-private transactions and recapitalizations of established public and
private companies. Xxxxxxx Xxxxx & Partners has significant investments in
PETCO Animal Supplies, Inc., a leading specialty retailer of premium pet food
and supplies; Rite Aid Corporation, a national chain of 3,400 drug stores;
VCA Antech, Inc., the nation's largest network of veterinary-exclusive
laboratories and free-standing, full service animal hospitals; Rand XxXxxxx,
the nation's leading map publisher; The Sports Authority, Inc., the nation's
largest sporting goods retailer; Liberty Group Publishing, Inc. a publisher
of community newspapers and related publications; Leslie's Poolmart, Inc.,
the nation's leading retailer of pool supplies; Varsity Brands, Inc., a
leading provider of goods and services to the school spirit industry; and
FTD, Inc., a leading supplier of floral services and products. Xxxxxxx Xxxxx
& Partners is the largest private equity firm in Southern California,
managing more than $3.6 billion of private equity capital.
Additional Information
Hollywood Entertainment Corporation will promptly file with the Securities
and Exchange Commission a current report on form 8-K, which will include the
merger agreement and related documents. The proxy statement that Hollywood
plans to file with the Securities and Exchange Commission and mail to its
shareholders will contain information about Hollywood Entertainment
Corporation, Xxxxxxx Xxxxx & Partners, the proposed merger and related
matters. Shareholders are urged to read the proxy statement carefully when it
is available, as it will contain important information that shareholders
should consider before making a decision about the merger. In addition to
receiving the proxy statement from the Company by mail, shareholders will
also be able to obtain the proxy statement, as well as other filings
containing information about the Company, without charge, from the Securities
and Exchange Commission's website (xxxx://xxx.xxx.xxx) or, without charge,
from the Company. This announcement is neither a solicitation of proxy, an
offer to purchase nor a solicitation of an offer to sell shares of Hollywood
Entertainment Corporation.
Hollywood Entertainment Corporation and its executive officers and directors
may be deemed to be participants in the solicitation of proxies from
Hollywood's shareholders with respect to the proposed merger. Information
regarding any interests that Hollywood's executive officers and directors may
have in the transaction will be set forth in the proxy statement.
Forward-Looking Statements
This press release contains various "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 regarding the
proposed transaction between Hollywood Entertainment Corporation and an
affiliate of Xxxxxxx Xxxxx & Partners and involving risks and uncertainties
related to the occurrence of future events. These forward-looking statements
are based on management's current expectations, assumptions, estimates and
projections about the current economic environment, the Company and its
industry. Certain factors that could cause actual events not to occur as
expressed in the forward-looking statement include, but are not limited to,
(i) the failure to obtain the necessary shareholder approval, antitrust
clearance or required financing in a timely manner or at all and (ii)
satisfaction of various other closing conditions contained in the definitive
merger agreement. Other potential risks and uncertainties are discussed in
Hollywood 's reports and other documents filed with the Securities and
Exchange Commission from time to time. The Company assumes no obligation to
update the forward-looking information. Such forward-looking statements are
based upon many estimates and assumptions and are inherently subject to
significant economic and competitive uncertainties and contingencies, many of
which are beyond the control of the Company's management. Inclusion of such
forward-looking statements herein should not be regarded as a representation
by the Company that the statements will prove to be correct.
CONTACT: Xxxx Xxxx
Senior Vice President, Finance and Business Development
000-000-0000
