S&P: Blockbuster unaffected

Standard & Poor's said that its ratings and outlook on Blockbuster Inc. (BB/stable/--) are not currently affected by the recent announcement of a proxy contest for Blockbuster's board at the company's upcoming May 11 shareholder meeting.

However, S&P said a positive outcome for the dissident shareholder group, led by financier Carl Icahn, may have implications for the credit in the case that the contest leads to unexpected changes in senior management. In addition, the shareholder group has called for at least a special dividend of $300 million. This amount would signal a significant change in financial policy and, because the company is already highly leveraged and operating in a contracting industry, could lead to a deterioration of credit protection measures without a substantial change in business and investment strategies.

Therefore, this proposal, if executed, could trigger a ratings downgrade or a change in outlook, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.