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Viacom to acquire Showtime and MTV

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.

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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.

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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.

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