Viacom has put the kibosh on its long-delayed plan to spin off its Blockbuster Inc. unit, prompted by the video-rental behemoth's business turnaround over the past few years, The Wall Street Journal reports.
Viacom has said over the past year that it was awaiting a comeback for Blockbuster's stock, which had been stuck below Viacom's offering price - before it proceeded with previously announced plans to split off the remaining 82.3% of the public unit. But Viacom now has "no plans" to do the split-off, Viacom President Mel Karmazin told the Journal. Karmazin reprotedly said he was "very enthusiastic about its future prospects."
Viacom will formalize its changed strategy in its 10-K annual report, expected to be filed with the Securities and Exchange Commission this week.
The Journal suggests Viacom's switch may fuel speculation that the company will make a play for the 17.7% of Blockbuster stock outstanding that is in the public's hands, to enable easier access to cash Blockbuster is now producing.
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