Deal to close in third quarter.

Viacom and Blockbuster today (June 18) announced the terms of their proposed separation, which will be completed in the third quarter.

In a statement, Blockbuster says it expects to pay $5 per share -- or a total of approximately $905 million based on the number of shares currently outstanding -- to all shareholders, including Viacom, in advance of the two companies separating. Viacom would receive a cash payment of $738 million as the owner of more than 81% of Blockbuster's shares.

Blockbuster is currently a publicly traded subsidiary of Viacom.

Blockbuster stock was trading at $15.16 this morning after the announcement, down about 1.5% from the previous day's close. Viacom was up 1.72% at $37.85.

Viacom plans to distribute its interest in Blockbuster through a "split-off" exchange offer to Viacom stockholders. Viacom shareholders will be able to exchange, tax-free, some of their Viacom common stock for shares of Blockbuster common stock held by Viacom. An exchange ratio has not yet been set.

In other Blockbuster news, the rental chain is promoting its new Flip Card game pass. Consumers who purchase the card for $49 receive unlimited game rentals for three months. One game can be rented at a time, and there are no return dates.

The Flip Card promotion runs through Sept. 6.