Hollywood Entertainment founder Mark Wattles, who failed in his effort to buy the company, offered to buy half of its video-rental stores to help Blockbuster win regulatory approval for a takeover.

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Hollywood Entertainment founder Mark Wattles, who failed in his effort to buy the company, offered to buy half of its video-rental stores to help Blockbuster win regulatory approval for a takeover.

Wattles wrote to Blockbuster’s board Monday proposing to buy 1,000 outlets, saying the purchase would help Blockbuster, the No. 1 U.S. video-rental chain, overcome antitrust concerns about its bid for Wilsonville, Ore.-based Hollywood.

The Federal Trade Commission made no announcement of the results of its meeting yesterday where Blockbuster’s bid for Hollywood Entertainment was discussed.

Sources close to the case told Reuters last week that the FTC is preparing to go to court to stop Blockbuster’s hostile bid.

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Wattles’ offer to team up with Blockbuster may prolong a three-month fight between Blockbuster and Movie Gallery for Hollywood, the No. 2 U.S. video-rental chain.

Hollywood agreed in January to be bought by Movie Gallery, the No. 3 operator, for $850 million in cash after Blockbuster made an unsolicited offer.

The FTC cleared Movie Gallery’s $13.25-a-share offer, and Hollywood cited potential regulatory objections in rejecting Blockbuster’s $14.50-a-share cash and stock offer.

Wattles, who owns 9.6 percent of Hollywood, quit as chief executive in February.

“I have two motives: I’d like to see Hollywood sold for as high a price as possible” and to own some stores, Wattles said in an interview. “So, to the extent I can facilitate the transaction between Blockbuster and Hollywood, I win on two fronts.”

Wattles said he would sell as many as half of his 6.14 million Hollywood shares to finance the purchase.