U.S. company also has bid for Hollywood.

Through its subsidiary Movie Gallery Canada, the chain has made a takeover bid to buy all outstanding shares of VHQ's common stock for $1.15 (Canadian) per share. VHQ owns and operates 61 stores in Alberta, Saskatchewan and the Northwest Territories.

In the U.S., Movie Gallery currently has a bid on the table to acquire Hollywood Entertainment Corp.

Joe Malugen, chairman, president and CEO of the Dothan, Ala.-based Movie Gallery, says in a statement: "VHQ will enhance our already strong presence in Canada, where we have more than 200 stores, and complement our existing portfolio of nearly 2,500 stores across North America. In addition, VHQ's online subscription offering in Canada has been very well received, and we will consider ways to leverage that infrastructure for continued growth in Canada."

Trevor Hillman, CEO/president of VHQ, says, "Our board of directors, management team and I believe this offer reflects a fair value for the company. We are very proud of our people and our company's accomplishments and believe that Movie Gallery is the perfect partner to build on this success."