FTC likely to block Blockbuster bid for rival Hollywood

03/16/05 - newratings.com

NEW YORK, March 16 (newratings.com) – The US Federal Trade Commission (FTC) is likely to block Blockbuster’s (BBI) hostile bid to takeover rival Hollywood Entertainment Company (HLYW).

Reuters quoted FTC sources as saying that the Commission’s competition bureau has concluded that the combination of the two large video rental chains would reduce competition. FTC’s staff is expected to make a formal recommendation to the agency's commissioners in the next few days on the Blockbuster bid for Hollywood Entertainment. Antitrust enforcers at the FTC are to take a decision by March 21 on whether they would oppose the proposed merger of the two video rental chains. Hollywood Entertainment has already rejected Blockbuster’s bid, saying it would raise significant antitrust issues resulting in uncertainties regarding the progress of the deal. Hollywood Entertainment has instead accepted rival Movie Gallery’s bid. Lawyers for Blockbuster have argued that the deal would not hurt competition since the video rental chains compete with retail giants, such as Wal-Mart Stores.