Blockbuster to split from Viacom parent
Rental chain Blockbuster is to be separated from parent company Viacom in a split-off exchange financial deal which will see the media giant relinquishing its 81.5 per cent stake in the group of stores.
Rental chain Blockbuster is to be separated from parent company Viacom in a split-off exchange financial deal which will see the media giant relinquishing its 81.5 per cent stake in the group of stores.
The terms of the deal will see Blockbuster handing out a $5 dividend, with a total payout to all shareholders of over $900 million - of which Viacom will pick up $738 million as an income tax free payment.
Blockbuster, which operates outlets on both sides of the Atlantic, is one of the leading chains in the entertainment rental market. The firm has arranged a $1.45 billion credit facility with JP Morgan, Citigroup and Credit Suisse First Boston to finance the split deal which will see it becoming independent from Viacom.
As for Viacom, chairman and CEO Sumner Redstone implied that the split represented a refocusing of the corporation's efforts on the media creation area, rather than the retail or rental areas further down the value chain.
"Following the split-off, Viacom will devote all its energies and resources into expanding our core areas," he said in a statement, "particularly the content creation engines that we believe will drive our future performance."