`No, we are not disappointed about the stock price,' John Antioco, Blockbuster chairman and chief executive said...
Blockbuster Video Chain Returns As IPO
By Brendan Intindola
NEW YORK (Reuters) - Video rental chain Blockbuster Inc. returned as a publicly traded stock Wednesday as parent Viacom Inc. (NYSE:VIA - news) spun off about 18 percent of the company at a per-share price below the expected range.
Blockbuster's initial public offering of 31 million common shares was priced at $15 each, below the announced range of $16-$18 per share. The offering represents 17.7 percent of Blockbuster's Class A common stock.
Blockbuster shares traded narrowly on the New York Stock Exchange, opening at 15, edging up to 15-1/16, then easing back to 15 in Wednesday afternoon trade.
``No, we are not disappointed about the stock price,' John Antioco, Blockbuster chairman and chief executive said during a media conference call. ``As you know, this has been a fairly tough market over the course of the last month or so, especially for retail stocks, so we are just happy to get the deal done.'
Blockbuster, based in Dallas, has over 6,500 video stores in the United States and 26 other countries. Antioco said the total is expected to increase by 1,000 new units each year over the next three years.
``Our plans are to open approximately 1,000 stores per year over the next three years, domestically and internationally,' he said. Of the 1,000, 700 will be domestic, and 300 will be outside the U.S.
Antioco was asked about the potential impact of technology on the videocassette-rental industry, particularly video-on-demand that is expected to be widely offered by cable TV operators. He said: ``VCR sales are at an all-time high, we continue to enjoy an exclusive window that comes before pay-per-view and general TV ... the projected coming of video-on-demand, which is talked about, ... has not actually rolled out any place.
``We know that Blockbuster today is the preferred intermediary between the Hollywood studios and consumers,' he said. ``We add a lot of value to the process, and we have a great brand and a great consumer franchise, and we will continue to be the preferred intermediary.
Blockbuster was a publicly traded company before it was bought by Viacom in a deal worth $8.4 billion when it was announced in January 1994. Through a series of transactions, Viacom went on to defeat Barry Diller's QVC Networks Inc. that year in a bidding war for Paramount Communications Inc.
Viacom is an entertainment group whose holdings also include the MTV, Nickelodeon and Showtime cable channels.
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