Viacom Details Blockbuster Spinoff6/18/2004 11:30 AM Eastern
New York — Viacom Inc. Friday announced the structure of the planned spin-off of its Blockbuster Inc. video retailer subsidiary, a deal that would pump about $738 million in cash into Viacom’s coffers.
The exchange offer will allow Viacom shareholders to exchange, on a tax-free basis, some or all of their shares of Viacom Class A or Class B common stock for shares of Blockbuster Class A and Class B common stock held by Viacom.
The exchange ratio will not be determined until the exchange offer commences, expected in the third quarter of this year.
"People did not have confidence jettisoning Blockbuster was actually going to get done," said Richard Greenfield, an analyst at Fulcrum Global Partners, was reported to have said. "Investors can finally focus on what matters to Viacom."
Shares of Blockbuster fell 14 cents to $15.18 on Friday on the New York Stock Exchange. Viacom's widely held Class B shares rose 52 cents, or 1.4 percent, to $37.18, also on the Big Board.