EXHIBIT 99.1

PRESS RELEASE

For release 7 a.m. CST, Wednesday, March 3, 1999

       HOLLYWOOD THEATERS ANNOUNCES RECAPITALIZATION AND MERGER AGREEMENT

Company to Tender For Its 10-5/8% Senior Subordinated Notes Due 2007 and Solicit
    Consents to Proposed Amendments to the Indenture as part of Transaction


     DALLAS, March 3, 1999 --  Hollywood Theaters, Inc. ("Hollywood" or the
"Company") announced that it has agreed to a recapitalization (the
"Recapitalization") sponsored by GTCR Fund VI, L.P., an investment fund managed
by GTCR Golder Rauner.  As part of the Recapitalization, Hollywood's parent,
Hollywood Theater Holdings, Inc. ("Holdings"), will merge (the "Merger") with a
subsidiary of Wallace Theater Corporation II ("Wallace Theater").  As a result
of the Merger, Holdings will become a wholly owned subsidiary of Wallace Theater
and Hollywood will continue as a subsidiary of Holdings.

     In connection with the Recapitalization, and as a condition thereto, the
Company will commence an offer to purchase the $110 million principal amount
outstanding of its 10-5/8% Senior Subordinated Notes due 2007 (the "Notes") and
a related solicitation of consents to proposed amendments to the indenture
governing the Notes.  The proposed amendments would permit the Recapitalization
and related financing transactions and provide Hollywood with significant
operational flexibility following the Recapitalization.

     Subject to the terms and conditions of the offer and solicitation, holders
who tender Notes and deliver consents to the proposed amendments will receive
total cash consideration of $700 per $1,000 principal amount of Notes.  This
amount consists of a consent payment of $30 and tender consideration of $670,
which includes all accrued and unpaid interest to but not including the payment
date under the offer.  The offer and consent solicitation will be conditioned
on, among other things, consummation of the Recapitalization and related
financing transactions, receipt of consents to the proposed amendments from the
holders of a majority of the aggregate principal amount of Notes outstanding and
the valid tender of at least 85% of the aggregate principal amount of the Notes
outstanding.

     In addition to consummation of the offer and consent solicitation, the
Recapitalization is subject to a number of conditions, many of which are beyond
the control of Holdings and Hollywood.

     Hollywood said that it expects to begin mailing offer and consent
solicitation documents by Friday, March 5th.  Donaldson, Lufkin & Jenrette
Securities Corporation is the financial advisor to the Company.  Chase
Securities Inc. is the financial advisor to GTCR and to Wallace

 
Theater. MacKenzie Partners, Inc. will serve as Information Agent for the offer
and consent solicitation.

     This press release contains forward-looking statements with respect to the
proposed Recapitalization, Merger and the transactions related thereto,
including but not limited to the anticipated tender offer and consent
solicitation and amendments to the indenture governing the Notes.  Such
statements are based upon current expectations and involve a number of risks and
uncertainties.  For the Company to use the "safe harbor" provisions of the
Private Litigation Reform Act of 1995, you are hereby cautioned that these
statements may be affected by the important factors, among others, set forth
below or noted in Hollywood's periodic filings with the SEC, and, consequently,
actual operations and results may differ materially from those expressed in
these forward-looking statements.  The important factors include, but are not
limited to, contingencies affecting the timing of the consummation of the
transactions referenced herein; the Company's dependence on motion picture
production and performance; risks associated with expansion and acquisitions;
and competition experienced by the Company's theaters.