Viacom agreed to spin off its cable TV systems valued at $2.25 billion to shareholders in an exchange offer that will reduce the company's debt by $1.7 billion. Viacom shareholders will have the opportunity through a dutch-auction exchange to continue to hold a stake in the cable business by exchanging shares of Viacom. The spinoff will result in the redemption of approximately 3% of Viacom's common stock. Viacom simultaneously agreed to sell to Tele-Communications Inc. all of the common shares of the new cable company for $350 million in cash. Viacom, which has been struggling to reduce the debt it assumed in acquiring Paramount Communications, is believed to be a potential bidder for CBS. CBS is expected to go into play as soon as Westinghouse makes a formal bid to acquire it.
Copyright July 1995 Crain Communications Inc.