Blockbuster makes offer for Hollywood

Blockbuster Inc. on Wednesday launched a hostile $991.6 million offer to acquire smaller rival Hollywood Entertainment Corp., escalating a two-way takeover battle for the video rental chain.

Blockbuster, the nation’s No. 1 video rental chain, said it would initiate a tender offer Friday that would directly offer Hollywood shareholders $14.50 per share in cash and stock for each share they own.

Blockbuster’s new bid represents a slight premium over the company’s closing price of $14.25 per share Wednesday, and a 9.4 percent premium to the $850 million, or $13.25 per share, buyout offer from No. 2 rental chain Movie Gallery Inc., which Hollywood accepted last month.

Blockbuster also would assume roughly $350 million of Hollywood’s debt, giving the deal an enterprise value of more than $1.3 billion.

Clothing

American Eagle sales warm up in January

Teen apparel retailer American Eagle Outfitters Inc. said Wednesday that January sales jumped 22 percent at stores open at least a year, surpassing Wall Street forecasts and raising its outlook for the quarter.

Analysts surveyed by Thomson First Call had expected the retailer’s same-store sales to increase 17.3 percent. Total sales — which include stores that have opened or closed within the past 12 months — increased 32 percent in January to $83.2 million.

Warrendale, Pa.-based American Eagle has a store in downtown Lawrence and a distribution center in Ottawa.

Internet

Google shares peak

Shares in Google Inc. surged 7 percent to a new high Wednesday as the online search engine leader continues to confound skeptics who thought the company would sputter after striking it rich in a closely watched IPO last summer.

Google shares jumped $14.06 to close Wednesday at $205.96 on the Nasdaq Stock Market. Earlier in the day, the stock reached $216.80, the highest since Google’s IPO, which was priced at $85 after the company couldn’t persuade enough buyers to pay its original target range of $108 to $135.

Amazon shares slide

Amazon.com Inc. said Wednesday that earnings for its all-important fourth quarter rose more than fourfold, but the Internet retailing giant was helped by a big one-time tax benefit and missed Wall Street expectations.

The results sent Amazon shares plunging 15 percent, $6.28, to $35.60 in after-hours trading on the Nasdaq Stock Market, on heavy volume of 10.2 million shares. That left Amazon shares near a 52-week low of $33 set Oct. 22, after the company reported third quarter results that disappointed investors.

Amazon shares had fallen 60 cents or 1.4 percent to close at $41.88 in regular trading Wednesday. Amazon has a distribution center in Coffeyville.

Justice

Ex-WorldCom leaders’ settlement withdrawn

A unique deal in which 10 former WorldCom directors would personally pay $18 million of a $54 million settlement to compensate investors over the company’s plunge into bankruptcy will be withdrawn, plaintiffs said Wednesday.

New York State Comptroller Alan Hevesi, the lead plaintiff, announced that the plaintiffs were pulling out of the deal after U.S. District Judge Denise Cote on Wednesday struck down a key component of the agreement.

Hevesi said the settlement was scuttled because Cote ruled that any jury award resulting from a Feb. 28 trial could not be reduced using a formula that would have taken into account the limited finances of the directors who settled.

Cybersecurity

Microsoft offers threat warnings to world

Microsoft Corp. offered Wednesday to begin alerting the world’s governments early to cyberthreats and security flaws in its attack-prone software.

Microsoft also wants to work with governments to help prevent and mitigate the damage from hacker attacks, said Giorgio Vanzini, the director of Microsoft’s government engagement team.

The announcement, in Prague on Wednesday by Microsoft chairman Bill Gates, coincides with a mounting threat to the company’s global dominance from “open source” software alternatives such as the Linux operating system.

Iran

GE halts orders for new business

General Electric Co., which has been accused of collecting “blood money” by doing business in Iran, will stop accepting any new orders for business in the country, company officials said Wednesday.

The move by the world’s largest company by market value comes just days after another conglomerate, Halliburton Co., announced its would wind down its operations in Iran.