Sumner Redstone’s anger over his former friend and Viacom executive chairman and CEO Philippe Dauman’s decision to sell off a portion of its Paramount Pictures assets reached a head Monday, when the media mogul amended the bylaws of his National Amusements Inc., the vehicle that holds all of his Viacom shares, requiring any sale of the movie studio would need unanimous board approval.
The move all but ends any attempt to sell a stake in the movie studio – Redstone controls 80% of Viacom’s voting shares and sits on the board of both companies. Redstone has increasingly raised the stakes in his battle with Dauman – he first removed him as a trustee in the trust that will hold his Viacom shares after his death or incapacitation in May – and the latest slap evoked a strong response from the Viacom CEO’s camp.
“These illegitimate actions stem directly from the invalid changes made to the National Amusements, Inc. board and are completely at odds with good corporate governance,” a spokesman for Dauman said in a statement. “They are clearly intended to impede the ability of the Viacom Board of Directors to fulfill its obligations to all stockholders, including the public non-controlling stockholders who own 90% of the equity of Viacom."
Dauman has sued Redstone in a Massachusetts court claiming his former boss is no longer competent to handle his affairs. A hearing on the matter is scheduled for tomorrow.
“While National Amusements is not opposed to a transaction that would unlock value at Paramount, it firmly believes that any proposed transaction should be thoroughly vetted and approved by Viacom’s full board, and the rationale for such a transaction should be clearly articulated to Viacom’s stockholders in advance,” NAI said in a statement.
Dauman has said he has received several offers for the Paramount stake and hoped to seal a deal as early as the end of this month. Analysts have favored a sale of a partial stake in the studio, adding that it could help to reduce overall debt.
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