The Associated Press

PORTLAND, Ore. - Video retailer Hollywood Entertainment Corp. said Monday that it has agreed to a buyout offer of about $840 million from a group led by a Los Angeles-based investment firm.

The deal for the No. 2 video rental chain in the nation - which operates 20 stores in Greater Cincinnati - would also include the assumption of about $300 million in debt.

The buyout comes as video retailers like Hollywood Entertainment and its bigger rival Blockbuster Inc. have come under pressure from video sales by discounters such as Wal-Mart Stores Inc. and Target Corp.

Hollywood Entertainment, based in suburban Wilsonville, Ore., owns and operates more than 1,920 Hollywood Video superstores and 600 Game Crazy specialty stores.

The proposed buyer is a group led by Leonard Green & Partners, a private investment firm specializing in buyouts. Its holdings include stakes in PetCo, Rand McNally, The Sports Authority and Rite Aid.

The deal is subject to shareholder approval, antitrust clearance and the completion of financing.

Under terms of the deal, Hollywood's shareholders would receive $14 a share in cash - representing a 31 percent premium over the company's closing price of $10.70 Friday.

Hollywood Entertainment shares soared more than 27 percent, or $2.96, Monday to close at $13.66 on the Nasdaq Stock Market.