NEW YORK — Viacom chairman Sumner Redstone is getting ready to pay Blockbuster shareholders a visit, but he may find them less than hospitable.
Redstone and chief exec Frank Biondi are expected to start making the rounds this week to seek support from Blockbuster’s largest holders, who have angrily watched the value of Viacom’s bid for Blockbuster slide since the deal was inked Jan. 7.
Some shareholders filed a motion in Delaware Court the week of Feb. 28 to prevent Blockbuster from spending about $ 1.25 billion on Viacom Class B shares to help the cable programmer complete the first part of its merger with Paramount Communications. When a judge rejected that request, the disgruntled investors responded with another appeal, then scrapped it and announced plans to seek an injunction against the Viacom-Blockbuster merger.
But most Blockbuster investors are just keeping a close eye on the Viacom B price on which their deal is based, certain Redstone will sweeten his offer. After all, he needs the vid chain’s $ 500 million annual cash flow to comfortably service an expected $ 10.7 billion in debt from the tripartite company.
Last week Redstone told Variety he has no intention of sweetening his offer.
Separately, Viacom said it completed its cash tender offer and will pay $ 107 per share for slightly more than 51% of Par’s outstanding common shares. On March 2, Par shares dropped $ 27.88 to $ 48.13 per share, reflecting the fact that any shares still on the open market will get no cash, only securities, when tendered.