A Marriage Made By Gump

If Sumner M. Redstone ever makes a movie out of his proposed merger with Blockbuster Entertainment Corp., he should could call it The Deal That Wouldn't Die. On Aug. 23, Blockbuster's board of directors voted to recommend that shareholders approve its $7.2 billion merger with Redstone's company, Viacom Inc. The move resuscitates a deal that has been declared dead more often than Jason.

The deal was rescued, at least in part, by the hit summer movie Forrest Gump. Blockbuster Chairman H. Wayne Huizenga had been disparaging the merger ever since Viacom won its battle for Paramount Communications Inc. in February. His main gripe: that his shareholders are to be paid mostly in Viacom Class B stock, which had fallen from $42 to as low as $21 because of the debt Redstone took on to pay for Paramount. But now, propelled by Gump, Viacom has rebounded to $34. That gives investors a slim pre-mium over Blockbuster's $6.6 billion market value.