NEW YORK -- Viacom International Inc., a leading independent distributor of television programming, reached agreement Monday with Warner Communications Inc. that will give Viacom 100 percent of the voting stock of both Showtime-The Movie Channel and MTV Networks for $500 million in cash and stock.
Under terms of the definitive agreement, WCI will sell to Viacom its 31 percent interest in Showtime-The Movie Channel and Warner Amex will sell to Viacom its two-third interest in MTV Networks and its 19 percent stake in Showtime-The Movie Channel.
The agreement was announced by Terrence A. Elkes, President and Chief Executive Officer of Viacom, and Steven J. Ross, Chairman and Chief Executive Officer of WCI.
Viacom will pay Warner $500 million in cash and issue to Warner warrants to acquire 1,625,000 shares of Viacom at $70 per share. Warner will purchase additional warrants from Viacom at $9.75 each allowing Warner to acquire another 625,000 shares of Viacom's common stock at $75 per share.
Viacom will also acquire the one-third interest in MTV currently held by the public at a cash price of $33.50 per share, provided the necessary consents are obtained by October 15 from Warner Amex.
Showtime-The Movie Channel operates two of the nation's largest satellite pay television services, with nearly 8.5 million subscribers.
MTV Networks operates three services: Music Television, Video Hits One and Nickelodeon.
'Viacom's business strategy has long emphasized the importance of developing and acquiring television programming to meet escalating future demand,' Mr. Elkes said in a statement.
The transaction, which both sides hope to close as promptly as possible, is subject to regulatory approval.
