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Article: Gallery gulps Hollywood: at higher financial cost.(Movie Gallery Inc., Hollywood Entertainment Corp.)
- Article from:
- Video Business
- Article date:
- May 2, 2005
- Author:
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Movie Gallery has completed its acquisition of Hollywood Entertainment, creating a near 4,500-store chain, but the deal cost the Dothan, Ala.-based rentailer more than anticipated to finance the acquisition.
The higher cost of debt dimmed Wall Street's view of the merger, causing Movie Gallery's stock to dip from its pre-merger high and is likely to cause analysts to lower earnings projections for the combined company for several quarters.
"No question the higher cost of debt will eat into earnings somewhat," McAlpine Associates president Dennis McAlpine said.
Movie Gallery ended up paying a total of $1.25 billion for Hollywood, including ...