You will be redirected back to your article in seconds

IRS OKs tax-free sale of B’buster

Company plans to sell 31 mil shares to public

NEW YORK — Viacom said Tuesday that it has received a green light from the Internal Revenue Service for a tax-free sale of its full holding in Blockbuster anytime after Sept. 29.

Viacom, which owns 100% of Blockbuster, is preparing to spin off a minority stake of the company in an initial public offering that is expected next week. It wanted to split off the rest of the video retailer eventually as well, as long as the IRS ruled, as it did Tuesday, that such a split would be tax free.

Sept. 29 marks the five-year anniversary of Viacom’s acquisition of Blockbuster. A sale of a majority stake before that date would have carried heavy tax penalties.

Viacom said that it intends to distribute its Blockbuster stock to Viacom shareholders who tender their Viacom stock in an exchange offer following the IPO. Under an agreement with the underwriters of the offering, Viacom will wait at least 180 days after the IPO before starting the exchange.

Saw it coming

Wall Streeters have been anticipating that Blockbuster would be fully split off sometime early next year.

Viacom announced July 19 that it planned to sell 31 million shares, or 17.7%, of Blockbuster to the public at an estimated price of $16-$18 a share.

Viacom has opted to divest Blockbuster since it doesn’t think the company is properly valued inside a larger entertainment conglomerate. The IPO was made feasible by revenue sharing and other measures that have turned the once-ailing unit into a strong performer with growing market share.

More Biz

  • Peak TV Saturation TV Placeholder

    Broadcaster Gray Television Sets $3.6 Billion Deal to Buy Raycom Media

    NEW YORK — Viacom said Tuesday that it has received a green light from the Internal Revenue Service for a tax-free sale of its full holding in Blockbuster anytime after Sept. 29. Viacom, which owns 100% of Blockbuster, is preparing to spin off a minority stake of the company in an initial public offering that […]

  • Heather Locklear arrested

    Heather Locklear Arrested, Charged With Assaulting Officer

    NEW YORK — Viacom said Tuesday that it has received a green light from the Internal Revenue Service for a tax-free sale of its full holding in Blockbuster anytime after Sept. 29. Viacom, which owns 100% of Blockbuster, is preparing to spin off a minority stake of the company in an initial public offering that […]

  • Xiaomi

    Chinese Smartphone Giant Xiaomi Aims for $6.1 Billion Hong Kong IPO

    NEW YORK — Viacom said Tuesday that it has received a green light from the Internal Revenue Service for a tax-free sale of its full holding in Blockbuster anytime after Sept. 29. Viacom, which owns 100% of Blockbuster, is preparing to spin off a minority stake of the company in an initial public offering that […]

  • Jamie FoxxBET Awards, Show, Los Angeles,

    2018 BET Awards: Kendrick Lamar Wins Big at Youth-Centered Show

    NEW YORK — Viacom said Tuesday that it has received a green light from the Internal Revenue Service for a tax-free sale of its full holding in Blockbuster anytime after Sept. 29. Viacom, which owns 100% of Blockbuster, is preparing to spin off a minority stake of the company in an initial public offering that […]

  • Variety Webby Nominations 2017

    Variety Wins 12 SoCal Journalism Awards Including Best Website

    NEW YORK — Viacom said Tuesday that it has received a green light from the Internal Revenue Service for a tax-free sale of its full holding in Blockbuster anytime after Sept. 29. Viacom, which owns 100% of Blockbuster, is preparing to spin off a minority stake of the company in an initial public offering that […]

  • Kendrick Lamar

    2018 BET Awards Complete Winners List

    NEW YORK — Viacom said Tuesday that it has received a green light from the Internal Revenue Service for a tax-free sale of its full holding in Blockbuster anytime after Sept. 29. Viacom, which owns 100% of Blockbuster, is preparing to spin off a minority stake of the company in an initial public offering that […]

  • SAG-AFTRA Hit With Class Action Suit

    SAG-AFTRA Hit With Class Action Suit Over Streaming Music Service Fees

    NEW YORK — Viacom said Tuesday that it has received a green light from the Internal Revenue Service for a tax-free sale of its full holding in Blockbuster anytime after Sept. 29. Viacom, which owns 100% of Blockbuster, is preparing to spin off a minority stake of the company in an initial public offering that […]

More From Our Brands

Access exclusive content