Blockbuster offers $5 per share dividend

August 20, 2004

NEW YORK (Reuters) - Blockbuster Inc. said Friday its board declared a special cash dividend of $5 per common share, a move that puts media conglomerate Viacom Inc. closer to divesting its stake in the video rental chain through a tax-free split-off.

Blockbuster (BBI: up $0.34 to $12.65, Research, Estimates) stock jumped 1.5 percent on the news in late morning trade on the New York Stock Exchange.

Plans for the dividend were unveiled in June.

Blockbuster said Friday it would finance the special dividend with proceeds from a $300 million offering of 9 percent notes due in the year 2012. The company will also borrow $650 million in term loans under a new $1.15 billion bank credit facility to pay for the dividend. Both deals closed today.

The special dividend is payable Sept. 3 to holders of record as of Aug. 27, the Dallas-based company said.

The company expects its Class A common stock to trade ex-dividend on Aug. 25.

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