Viacom Inc. commenced an offer to its stockholders Wednesday for the exchange, on a tax-free basis, of some or all of their shares of Viacom stock for shares of Blockbuster Inc.
Assuming the exchange offer is fully subscribed, Viacom will dispose of its entire ownership interest in Blockbuster, which currently totals approximately 81.5% of outstanding shares in the provider of in-home movie and game entertainment.
Under the terms of the offer, each holder of Viacom class-A and class-B common stock will receive 5.15 shares of Blockbuster stock -- consisting of 2.575 shares apiece of Blockbuster class-A and class-B common stock -- in exchange for each Viacom share tendered.
Viacom said it will accept pursuant to the offer up to an aggregate of 27,961,165 shares of Viacom class-A and class-B common stock.
The exchange offer expires at midnight (EST) Oct. 5.