New York -- Viacom Inc. has agreed to redeem from Bell
Atlantic Corp. the remaining $600 million in preferred stock held by the telco as part of
a 1993 investment made during the battle for Paramount Communications Corp., Viacom said.
Viacom said it agreed to pay $612 million in cash to redeem
the preferred stock, plus accrued dividends. On Dec. 2, Viacom paid $564 million, plus
accrued dividends, to redeem the first $600 million of the $1.2 billion in preferred
stock. In all, the preferred stock earned a 5 percent cash dividend and was convertible
into about 17.1 million Viacom Class B shares.
To accommodate the redemption, Viacom said it increased its
$1.75 billion equity repurchase program, announced in August, to $2 billion.
Viacom obtained the original $1.2 billion investment in
October 1993 from Nynex Corp., which later merged with Bell Atlantic. Viacom used the cash
as part of its $10 billion acquisition of Paramount in 1994.
Nynex and Viacom said at the time they envisioned a
"broad-based strategic alliance," pairing Viacom's programming with
Nynex's distribution. But plans by Nynex and Bell Atlantic to aggressively enter the
video business never panned out, and the investment became strictly financial.