Viacom Sells Stake in Lifetime Cable Network for $317.6 Million

Strategic Insights -

Viacom Inc. has agreed to sell its one-third stake in the Lifetime cable network to Hearst Corp. and Capital Cities/ABC Inc. for $317.6 million in cash. This decision is part of Viacom's broader strategy to focus on its core assets and priorities. The sale is expected to close on April 4, with Viacom potentially using the funds to improve its offer for Blockbuster Entertainment Corp. Analysts believe that Viacom is under pressure from Blockbuster shareholders to sweeten its offer, which has an estimated value of $8 billion.

Key Takeaways:

  • Viacom has agreed to sell its one-third stake in Lifetime cable network to Hearst Corp. and Capital Cities/ABC Inc. for $317.6 million in cash.
  • The sale is expected to close on April 4, with Viacom using the funds to improve its offer for Blockbuster Entertainment Corp.
  • Viacom chairman Sumner Redstone and chief executive officer Frank Biondi stated that the decision was made because a minority interest in Lifetime does not fit into Viacom's strategic objectives.
  • Lifetime was formed in 1984 through the combination of the Daytime cable network and the Cable Health Network.
  • The network is available on more than 5,800 cable systems, serving close to 59 million households.
  • Analysts believe that Blockbuster shareholders may reject the $8 billion buyout in May due to the decline in value of Viacom stock since the offer was announced in January.

Statistics:

  • $317.6 million: The amount Viacom is selling its stake in Lifetime for.
  • 1/3: The stake Viacom is selling in Lifetime.
  • 10 years: The time period in which Viacom has developed Lifetime with Hearst and Capital Cities/ABC.
  • $8 billion: The value of the Viacom stock portion of the Blockbuster Entertainment Corp. offer.
  • 5,800: The number of cable systems on which Lifetime is available.
  • 59 million: The number of households that can access Lifetime.
  • 1984: The year Lifetime was formed.
  • $10 billion: The price Viacom paid for Paramount Communications Inc.

Sources:

  • "Viacom sells stake in Lifetime cable network" by Reuters (no date)