WCEC - Video City Assumes Management of West Coast Video
PHILADELPHIA, Mar 10, 2000 (BUSINESS WIRE) --
Giant Leap Taken Toward Completion of Merger of Two Companies
Video City, Inc. (OTCBB: VDCT) announced today that it has assumed
operational control of West Coast Entertainment Corp. (OTCBB: WCEC)
pursuant to a plan providing for the resignations of the board and
officers of West Coast and the execution of a management agreement
assigning operational authority to Video City. This move marks the
beginning of the completion of the previously announced merger between
the two companies.
The announcement was made by Robert Y. Lee, Chairman and Chief
Executive Officer of Video City, who also noted that in connection with
the management agreement, and in preparation for the upcoming merger of
the two companies, Video City has already commenced a move of its
corporate headquarters from Torrance, California to Philadelphia,
Pennsylvania. This action is expected to result in a significant
reduction of operating expenses for the combined companies.
"This is a major leap toward the completion of our merger with West
Coast Entertainment," said Lee. Terms of the previously announced
merger agreement between West Coast and Video City continue to remain
in effect and are contingent on a number of conditions, including the
satisfaction of both the West Coast and Video City bank groups.
"While we are delighted that the progress in our efforts has resulted
in this management agreement, which allows the two companies to begin
to fully effect certain synergistic and cost-saving measures in
anticipation of the completion of the merger, there is still work to do,
" said Lee. "Video City is extremely fortunate to have a strong
management team consisting of individuals who have demonstrated the
hard work, commitment and personal sacrifices that have brought us to
this point of success and which I believe will enable this merger to be
extremely successful upon completion and provide shareholder value."
"I believe Robbie Lee will build a team that utilizes the best of both
Video City and West Coast," said Ralph Standley, former Chairman of
West Coast. "The resulting merger should be very positive for the
shareholders of each company."
Industry Leaders Comment on Video City Progress in Merger Effort
Video City's announcement that it has assumed total management
control of West Coast Entertainment in anticipation of the completion
of the merger of the two companies is being hailed among industry
leaders as a major success by the growing Video City.
Peter Balner, President of Blow-Out Video and founder of Palmer Video,
and former member of the West Coast board of directors, said, "I think
the world of Robbie (Lee). It is amazing to see what he has been able
to accomplish in a short period of time. Video City is one of the few
companies among the second tier of video retailers to be able to
demonstrate a vision and ability to get things done."
"It is a pleasure to serve on a board with a leader as creative and
energetic as Robbie Lee," said Gerry Weber, member of the Video City
Board of Directors and formerly president of Blockbuster Music and
Senior Vice President of Blockbuster Video. "No one in the industry has
as strong a work ethic as Robbie and I believe the West Coast merger
will position Video City to become the leader in this segment of the
video retailing industry, providing an attractive alternative to
independents in the marketplace today."
John Sheehy, Managing Director of The Value Group LLC, Video City's San
Francisco-based advisor, who is also a member of Video City's board of
directors, said: "This latest transaction shows that Robbie is an
astute consolidator who has been very effective in assembling some of
the best retail assets in this industry. This proves that he can really
get the tough deals done."
"We believe this transaction will enhance value for West Coast
shareholders and creditors and look forward to working with Video City
toward a successful closing of the previously announced merger," said
Chris Atayan, principal of Slusser Associates, Inc., the investment
banker for West Coast Entertainment Corporation.
Video City owns and operates 76 video stores in 10 states. It has grown
substantially from 18 stores in the past two years and is one of the
nation's fastest-growing entertainment companies. West Coast operates
236 company-owned stores in 16 states and approximately 90 franchised
stores throughout the country.
This release contains forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, such as statements of the Company's plans,
activities, expectations and intentions, that involve risks and
uncertainties that could cause actual results to differ materially from
those discussed in such forward-looking statements. Factors that could
cause or contribute to such differences include, but are not limited
to: the ability to make future acquisitions; the demand for video
tapes, both rental and sales, which may be affected by seasonal
factors, weather, the level of home viewing; competition from other
retailers; the Company's ability to manage and staff its growth; and
other factors disclosed under the caption "Special Considerations" in
the company's Annual Report on Form 10-K for the fiscal year ended
January 31, 1999.
Copyright (C) 2000 Business Wire. All rights reserved.
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CONTACT: Martin E. Janis & Co., Inc.
Bev Jedynak, 312/943-1100
Fax: 312/943-3583
E-mail: bevj@ehola.com
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