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Shares of Hollywood Entertainment jumped Friday after billionaire corporate raider Carl Icahn revealed he accumulated another 1 million shares of the company, bringing his stake to 10.84%.

The move sparked speculation on Wall Street that the bidding war for Hollywood, which appeared to be over after Blockbuster dropped out March 25, could be back on.

In a filing with the Securities and Exchange Commission, Icahn said he had bought the shares over the past week at an average price of about $13.15.

Traders took that as a sign that another suitor for Hollywood could still emerge, or that Icahn had a plan to force Movie Gallery to up its offer for Hollywood by gaining control of a large stake in the company.

By midday Friday, shares of Hollywood had pushed above the $13.25 buyout price contained in Movie Gallery’s merger proposal.

The Movie Gallery deal is slated to go before Hollywood shareholders for a vote April 22.

“I don’t think Icahn would bother (with the additional shares) for the 10¢ differential,” a buy-side analyst said, referring to the difference between Icahn’s share purchase price and Movie Gallery’s buyout price.

None of the principals could be reached for comment.

Trading volume in Hollywood shares Friday was nearly 10 times its daily average.

Movie Gallery stock tanked on the day, falling more than a dollar in midday trading; Blockbuster stock was up modestly.

Meanwhile, Blockbuster continued its retrenchment after apparently losing the battle for Hollywood. Last week, it announced it would will layoff 200-300 staffers at its Dallas headquarters and a facility in nearby McKinney, Texas, by the end of April as part of a broad cost-containment drive.

The layoffs were said to be unrelated to the loss of Hollywood, but come as Blockbuster prepares to do battle in a new competitive landscape.

If Movie Gallery does manage to close its deal for Hollywood, the combined chains would have roughly 4,500 stores and control about 25% of the rental market. Blockbuster is not quite twice as large.

Blockbuster also is racing to catch up with subscription rental leader Netflix and is pouring money into its online operations. In fact, Blockbuster officials said the layoffs are part of a broader move to offset the impact of spending an additional $70 million on its online operations this year, on top of its original plan of $50 million.

In addition to the layoffs, Blockbuster is trimming about $30 million from its planned capital budget by suspending the rollout of its Game Rush departments for the rest of this year and slowing the rate of store openings.

(Paul Sweeting is a reporter for Variety sister publication Video Business.)