National Amusements, the holding company for media mogul Sumner Redstone controlling stakes in Viacom and CBS, said it would block any sale of a portion of its Paramount Pictures movie studio, claiming it would be bad for shareholders and prevent the sale of Viacom as a whole.
Viacom has been shopping a 49% interest in Paramount for months, and according to reports is close to a deal with Chinese investor Dalian Wanda Group for $10 billion, significantly higher than most analysts had valued the interest.
Redstone and NAI have been opponents to selling the studio stake ever since it was first revealed and it was the catalyst for a series of lawsuits between the two companies. Viacom is seeking to have Redstone declared incompetent to block his moves to oust several member of Viacom’s board of directors, including company CEO Philippe Dauman.
In a statement Friday, NAI said that any deal would “undermine rather than advance” the stated goal of increasing shareholder value and would “chill the interest of other parties that may be interested in a larger transaction involving all of Viacom.”
“Paramount is one of Viacom’s most valuable assets,” NAI continued. “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.”
Viacom, in a statement, backed its original plan.
“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,” Viacom said in a statement. “We will continue to pursue the best outcome for all of Viacom’s shareholders.”
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