Viacom Inc. said Thursday it has secured the expected $ 1.25 billion investment from its intended merger partner, Blockbuster Entertainment, enabling the cable programmer to acquire Paramount Communications.
Specifically, Blockbuster bought about 23 million shares of Viacom’s Class B common stock for $ 55 per share.
That investment allowed the cable programmer to announce it would pay $ 107 cash per share today for about 51.74% of the almost 119.17 million Paramount Communications shares tendered into its offer. All shares not exchanged for cash will be returned and later exchanged for a package of assorted securities. The share purchase represents the completion of the first part of Viacom’s merger with Paramount, worth about $ 9.8 billion.
Selling the vision
Now Viacom chairman Sumner Redstone and chief exec Frank Biondi can concentrate on selling their vision to Blockbuster shareholders, who have threatened to block Viacom’s proposed merger with the video chain in anger that the deal price has sunk since it was announced Jan. 7.
Some even tried to block the $ 1.25 billion investment in Delaware Chancery Court, where a judge rejected their request for a preliminary injunction. The dozen or so shareholders involved in the action are now attempting to prevent the merger, which Viacom expects to submit for shareholder approval in late April or early May.
Viacom Class B and Blockbuster shares both ended the day down $ 1.25 per share at $ 25.63.