Los Angeles-based private equity firm Leonard Green & Partners will most likely not go through with a previously announced $888 million (€724 million) buyout of movie rental company Hollywood Entertainment, according to a government filing issued by Hollywood on Friday.
According to the statement to the SEC, the company said Leonard Green had informed Hollywood that, due to industry and market conditions, the firm “believes the financing condition to the completion of the merger will not be satisfied.”
Hollywood said that it is already considering alternatives to the deal, though it did not specify what actions were taken.
At the end of March, Leonard Green had agreed to buy all outstanding shares of Hollywood in a going-private. The firm had said it would pay $14 each for 63.4 million shares of the Wilsonville, Oregon-based company, which owns Hollywood Video, the second largest chain of movie-rental stores in the US behind Blockbuster Video.
Hollywood, which currently operates more than 1,920 Hollywood Video locations and 600 Game Crazy video game stores, had been considering options, including finding a buyer, after a drop in 2003 net income and losses in two of the past five years. Competition from Blockbuster, Netflix mail-order rentals, Wal-Mart Stores and video-on-demand services has been causing the company’s market share to slip.
Leonard Green declined to comment on the announcement.