Viacom Launches Blockbuster Exchange Offer

Sep 8, 2004  •  Post A Comment

Viacom on Wednesday launched an exchange offer that is expected to dispose of the media giant’s entire 81.5 percent stake in the video retailer Blockbuster.

As part of the deal, Viacom said holders of its Class A and Class B common stock will receive 5.15 shares of Blockbuster stock for each share of Viacom stock tendered in a deal that will be tax-free to shareholders. The opportunity to exchange the Viacom shares expires Oct. 5.

The transaction puts the value of Viacom shares at a 17.6 percent premium over Tuesday’s close of $34.60 a share. The exchange offer comes a month after Viacom pulled in $700 million following Blockbuster’s issuance of a special $5-a-share cash dividend.