Wattles looking to buy Hollywood stores.

Blockbuster's bid to take over rival rental chain Hollywood Video has gained the support of Hollywood's former CEO, Mark Wattles.

In a letter sent Monday (March 21) to Blockbuster and to Hollywood's board, Wattles said he and a group of unnamed investors are interested in acquiring up to 50% of Hollywood's stores, or about 1,000 locations.

"It is my opinion based upon advice I have received from counsel that the [Federal Trade Commission] would be more inclined to permit a merger between Blockbuster Inc. and Hollywood Entertainment if certain of the Hollywood Video stores that the FTC perceives as more directly competitive to Blockbuster were divested," Wattles stated.

The FTC has filed a motion to bar Blockbuster from moving forward on its bid. The commission has approved a rival bid for Hollywood from Movie Gallery.

Wattles, currently chairman/CEO of Denver-based retailer Ultimate Electronics, is Hollywood's largest shareholder, with more than 6 million shares. Blockbuster's bid would bring him more profit: The company is offering $14.50 per share, vs. Movie Gallery's $13.25.

Blockbuster has stated that it may begin a hostile takeover of Hollywood.

Blockbuster and Movie Gallery declined comment. Hollywood reps could not be reached.