The battle for video and DVD rentals heated up this week as Blockbuster indicated it would seek to buy out rival Hollywood video and would do so by hostile takeover if necessary. Thus far, Hollywood has refused to negotiate a sale with Blockbuster and the number one chain is apparently losing patience.

Officials at Blockbuster said they would give the board of Hollywood video until the middle of January to decide whether or not to accept a bid for Hollywood Video shares at $11.50 per share. If they decline, a hostile takeover would begin.

Since Blockbuster made the offer, Hollywood Video shares have increased in value by approximately 30 percent and are now at $13.16, well above the offer tendered by Blockbuster.

Some analysts feel that the offer is an attempt by Blockbuster to circumvent the board of directors at Hollywood Video and appeal directly to the shareholders.

The offer includes $700 million in cash and the assumption of $300 million in Hollywood Video's debt. After the announcement was made, shares of Blockbuster Video fell to $9.33.