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Merger of Village Force and Hoyts seems doomed

By Aimee McClinchy

Friday 16th June 2000

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and Ray Lilley

Senior staff at the shared headquarters of cinema duopoly Village Force Hoyts have been told the merger between the cinema giants is off but management insists it is still in talks.

The merger between Village Force and Hoyts is said to have crumbled in the face of Commerce Commission opposition despite the two already having merged their names, office and support operations.

Insiders said the two companies realised they could not win a court case against the commission, which has objected to their dominant position holding 80% of the market.

But Village Force chief executive Joe Moodabe discounted suggestions the deal was off and claimed the two companies were still trying to work out merger issues with the commission.

"We are hopeful still of an agreement with the Commerce Commission on the issues. We are pursuing the issues involved," he said.

"We are still in discussion with the Commerce Commission.

Some exhibitors and distributors believe the companies plan on trying to negotiate a "lesser" deal.

Village Force and Hoyts announced they planned to merge a year ago and wrote to the commission in April 1999 through their lawyers Russell McVeagh to signal their intentions.

In the letter they made it clear they were not seeking clearance or approval from the industry watchdog (NBR July 23) but were giving it notice.

Distributors and exhibitors have been opposed to the deal in the belief it could lead to favouritism and a lack of competition between the dominant players and independent cinemas.

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