Company Town : Blockbuster Toasts Merger With Viacom : Deals: The $8.4-billion stock swap is approved by shareholders on both sides.
Blockbuster Entertainment Corp. ended a spectacular seven-year run as an independent company Thursday with tears, champagne and flashy corporate videos at a special stockholders meeting that approved a stock-swap merger with Viacom Inc.
Shareholders representing 57.7% of Blockbuster’s outstanding stock, including its chairman and big stockholder, H. Wayne Huizenga, voted for the $8.4-billion merger announced in January.
The deal will create a global company with stakes in nearly every major segment of entertainment.
“We will be able to make a movie, put it in our theaters, show it on our pay-per-view channel and sell and rent it in our stores. We will also be able to publish the book, make the video game and sell it in our stores,” Huizenga told hundreds of shareholders and Blockbuster employees at the meeting.
The combined company will be a major movie maker, book publisher, cable service operator, entertainment retailer and theme park operator.
Viacom’s best-known properties include MTV, Paramount Pictures and Simon & Schuster.
Huizenga said the deal is worth about $30 a share to Blockbuster stockholders and will give them 52% to 53% of the combined companies’ stock.
Blockbuster’s stock closed down 75 cents at $27.50 on Thursday on the New York Stock Exchange, and Viacom Class A shares fell 75 cents to $40.50 on the American Stock Exchange.
Viacom shareholders also overwhelmingly approved the merger in a separate meeting in New York.
Blockbuster founder Huizenga, who invested $18 million in a 19-store video rental chain in 1987 that now operates more than 37,000 video outlets and 600 music stores worldwide, told shareholders that the firm needed to move into other areas of entertainment.
But he also said Blockbuster could not hope to duplicate its phenomenal growth of the last seven years.
Seventy top Blockbuster executives and managers will stay on after the merger, Huizenga said.