Redbox DVD machines have forced Blockbuster to come out with its own vending machines
to compete. (AP Photo/Damian Dovarganes)

Associated Press
| Blockbuster Inc. on Monday urged shareholders to reject a bid by an
activist investor to garner a seat on the company’s board.

Gregory S. Meyer, who founded a DVD rental kiosk company in 2001 called
DVDXpress, is looking to take the seat held by insurance executive James
W. Crystal.

Meyer, 38, has also played a small role in the erosion of Blockbuster’s
traditional rental store business. He sold DVDXpress in 2007 to Coinstar
Inc., which later merged the company with its own Redbox business. The
spread of Redbox vending machines, which offer new
releases for $1 per
night, has forced Blockbuster to come out with its own vending machines
to compete.

In a securities filing last month, Meyer said Blockbuster’s board “lacks
sufficient expertise and alignment of interests with shareholders,
which has led to a significant loss of shareholder value over the past
several years.”

Blockbuster responded Monday, saying Meyer does not have “the critical
industry and business experience” needed to serve as a director. The
company warned that allowing Meyer on the board would be foolhardy given
the host of challenges it faces, “from a constantly changing
competitive landscape to significant financial and liquidity pressures.”

According to his filing, Meyer is now an independent consultant to
companies in the home entertainment industry. He holds 620,000 shares of
Blockbuster’s common shares, or about 0.44 percent. Attempts to reach
Meyer though a telephone number listed on his proxy filing were not
successful.

Blockbuster shares were up a penny at 36 cents in midday trading.