In response to a move by Blockbuster Entertainment to increase its position in Spelling Entertainment on Wednesday, the Hollywood TV programmer’s shares headed skyward, gaining 10% in value.
The Fort Lauderdale video and music retailer added nearly 10% or 4.9 million shares to its Spelling stake in a private transaction, bringing its position to 63.5%, from 53%.
(Daily Variety, June 30)
Spelling shares was one of the most active on the New York Exchange, closing up 5/8 to $ 6.50. The volume was 311,000 vs. an average daily volume of 51,200. Blockbuster’s average purchase price was $ 6.38 a share.
Generally speaking,”… there is very little incentive to raise your stake (from 50%) unless your long-term intentions are that you would take control not only of operations but of the cash flow as well,” opined Jeff Logsdon, an analyst at Seidler Amdec.