Paramount stake sale could hamper deal for Viacom: National Amusements

A Viacom spokesman did not immediately return a request for comment.

Redstone controls Viacom and CBS Corp. via National Amusements, and a representative said the mogul concurs with the statement.

Chinese companies are increasingly staking their claim on Hollywood, with Dalian Wanda Group Co. closer to its goal of becoming one of the world's dominant entertainment companies following reports it is in talks to buy a minority stake in the Paramount Pictures movie studio.

While analysts and studio insiders speculate Dauman's motives are to pad Viacom's stock value, it's also been seen as exerting muscle he doesn't have - as Dauman is engaged in a monthslong battle with Sumner and his caretaker and daughter Shari Redstone.

Media company Viacom is now looking to sell 49 percent of its Paramount Pictures movie studio, against the wishes of majority owner Sumner Redstone.

The deadlock between the Redstone family and Viacom, Inc.


"Unless Viacom's board presents a concrete plan that convinces him otherwise, Redstone continues to believe that it is in the best interest of Viacom that Paramount Pictures should remain wholly owned by the parent company, " a spokesperson for Redstone said in late May.

Wall Street seems skeptical that Dauman will be able to pull off the deal with Wanda, which would require that he successfully navigate several major roadblocks that the Redstones have placed in his path. Dauman has said the divestiture would unlock value of $10 or more per Viacom share and that he would use the proceeds from a sale to pay off debt and for strategic development, particularly overseas.

Why find a buyer for an asset that may not even be for sale? Further, any Paramount transaction would chill the interest of parties that may be interested in a larger transaction involving all of Viacom.

Last week, Viacom urged a judge to fast-track the case and decide whether the Redstone family could oust five Viacom board members, including Dauman. Under an order by that court, Viacom would have to give National Amusements five days notice before entering into a deal for Paramount. Dauman is suing in MA, where the Redstone trust was executed, and fighting him in Viacom's corporate domicile of Delaware.

Dauman contends Sumner Redstone is no longer mentally competent to make such decisions and alleges he's being improperly influenced by Shari. Redstone is seeking to have the litigation take place in California, where he lives.


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