National Amusements Opposes Potential Paramount Stake Saleby
Wanda said to be in talks to buy 49% of the Hollywood studio
Decision on sale should be left to new board, company says
Sumner Redstone’s National Amusements Inc., the controlling shareholder of Viacom Inc., will oppose any deal by the company to sell a stake in the Paramount Pictures, saying it would “undermine rather than advance” shareholders’ interests.
Viacom is said to be in talks to sell 49 percent of the storied studio to Chinese billionaire Wang Jianlin’s Dalian Wanda Group Co. The company is seeking a valuation of $8 billion to $10 billion for Paramount, the Wall Street Journal reported earlier this week, citing a person familiar with the matter.
“Any short-term benefits that might result from a Paramount transaction would be outweighed by the severe negative impact on Viacom’s future strategic flexibility to best capitalize on this important asset,” National Amusements said in an e-mailed statement Friday.
Selling a stake in Paramount has become a crucial objective for Viacom Chief Executive Officer Philippe Dauman, who’s locked in three-state legal battle for control of the media empire with 93-year-old Redstone. Funds from a sale could help the company reduce debt, finance a turnaround of the TV networks such as Comedy Central and stoke movie production at Paramount, a perennial under-performer in Hollywood.
But a deal in which Paramount took on a minority partner could damp interest in a “larger transaction” involving all of Viacom, National Amusements said.
Viacom countered in an e-mailed statement that Redstone’s holding company is trying to interfere with a potential deal “without even waiting for the facts.”
Viacom’s Class B shares slipped 1.5 percent to $44.15 at 12:11 p.m. The stock has fallen 28 percent in the past year.
National Amusements also said the fate of the studio shouldn’t be decided by people “who may be leaving the board shortly.” Last month Redstone moved to oust five Viacom directors, including Dauman, but agreed to let them stay on in their roles while the court cases play out. Under a Delaware court ruling, Viacom must give Redstone five days’ written notice before striking any deals involving Paramount.
“The five new independent directors bring expertise managing successful creative businesses and they should not have their strategic options limited,” National Amusements said in the statement. “If the new board decides to pursue a sale of a minority stake in Paramount as part of a larger strategic plan for Viacom, we are confident that a buyer could then be identified and a sale consummated.”
In court filings and in public statements to the press, Redstone and his daughter Shari Redstone have said they’ve been denied information about the Paramount sale process. Redstone has said he’s opposed to the sale of the studio which he has called “my baby.”
People speaking on behalf of Redstone have listed his opposition to such a sale as a reason he removed Dauman and George Abrams from the board of National Amusements, and from the family trust that will govern his assets when he dies or is incapacitated.