National Amusements Opposes Possible Viacom Sale of Paramount Stake
Sumner Redstone's company, through which he controls Viacom and CBS Corp., says a deal could hurt a potential "larger transaction involving all of Viacom."
Viacom's plan to sell a stake in Paramount Pictures could have a “severe negative impact” on the company, controlling shareholder Sumner Redstone's National Amusements said Friday.
Viacom has been reported to be in talks with China’s Dalian Wanda Group to sell a 49 percent stake in Paramount.
“National Amusements has one goal for Viacom, which is to create long-term value for all of Viacom’s shareholders," National Amusements said in a Friday statement. "Undertaking a Paramount transaction at this time would undermine rather than advance this goal." Such a deal could also hurt a potential “larger transaction involving all of Viacom,” the company said.
Redstone controls Viacom and CBS Corp. via National Amusements, and a representative said the mogul concurs with the statement.
"Paramount is one of Viacom’s most valuable assets," according to National Amusements' statement. "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. The complexities of joint-ownership of Paramount would undoubtedly extend far beyond Paramount into other divisions of Viacom and limit its options to take on partners. Further, any Paramount transaction would chill the interest of parties that may be interested in a larger transaction involving all of Viacom."
Redstone and his daughter Shari have been in a showdown with the Viacom board and have been looking to replace chairman Philippe Dauman and several others.
Added National Amusements: "Viacom’s full board, including the five new independent directors elected on June 16, should have the opportunity to carefully review any proposed Paramount transaction and determine whether it is in line with a long-term strategy for Viacom. This decision should not be made by individuals who may be leaving the board shortly. The five new independent directors bring expertise managing successful creative businesses and they should not have their strategic options limited. 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."
“It is beyond understanding that 'National Amusements' would continue in its attempts to interfere with a potential transaction that would create a unique opportunity to drive long-term value for both Paramount and Viacom, without even waiting for the facts," a Viacom representative said Friday. "We will continue to pursue the best outcome for all of Viacom’s shareholders.”