MIAMI — Blockbuster Entertainment Corp. chairman Wayne Huizenga has told securities analysts that he was unhappy with the value of Viacom Inc.’s buyout offer for the video rental giant, a company spokesman said Friday.
The New York Times reported Friday that Huizenga told industry analysts at a closed-door meeting earlier this week in New York that, at Viacom’s current stock price, he did not have to recommend that shareholders vote in favor of the deal.
“The gist of the New York Times story is correct,” a Blockbuster spokesman said.
The newspaper report said Huizenga indicated to analysts that Viacom’s class B non-voting stock would have to trade at about $ 42 a share to justify a sale.
Viacom class B shares — a big part of the deal — have dropped sharply since the deal was announced Jan. 7, and fell 75 cents Friday to end at $ 29.13 on the Nasdaq system.
The deal was worth about $ 31 per Blockbuster share when it was announced, but that has since fallen to less than $ 24. Blockbuster’s stock rose $ 1.25 to $ 27.38 on the New York Stock Exchange.
Approval of the merger requires a simple majority vote by shareholders. Huizenga and his associates own about 23% of Blockbuster shares.
Dissident Blockbuster shareholders have tried without success so far to block the company’s merger with Viacom and failed to get an emergency court order earlier this month.
The proposed merger, in which Blockbuster shareholders would receive a package of stock and cash, was announced earlier this year when Viacom needed to boost its bid for Paramount Communications Inc.
As part of the merger agreement, Blockbuster bought 23 million shares of Viacom’s class B stock for $ 1.25 billion.
A source close to Viacom said the two companies are continuing to work on the merger, with lawyers and executives from both companies pressing ahead on proxy materials for a vote on the planned combination at Blockbuster’s annual meeting of shareholders. The Blockbuster spokesman said the company had scheduled its annual shareholders meeting for May 24 in Fort Lauderdale. Fla.