Viacom on Friday criticized Sumner Redstone’s company, National Amusements, for publicly opposing Viacom CEO Philippe Dauman’s efforts to sell a stake in Paramount Pictures.
The statement from a Viacom spokesman expressed disbelief that National Amusements would continue to interfere with a transaction that could “drive long-term value.” It had "National Amusements" in quotes, presumably because Dauman and other Viacom directors are in court trying to invalidate actions by National Amusements because it claims the 93-year-old Redstone is under the undue influence of his daughter Shari Redstone.
The Redstones are battling Dauman and other longtime Redstone associates over the mogul’s $40 billion media empire, which includes Viacom and CBS.
Earlier this week, it was reported that Viacom was in talks to sell 49% of Paramount to Dalian Wanda Group.
That drew a statement from National Amusements that said, in part that “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 statement added that no deal can get done without a unanimous vote of the Viacom board, where Sumner Redstone and Shari Redstone have votes. It also said that a status quo order in a Delaware court prevents Viacom from making a transaction of this magnitude without notifying National Amusements.
In response to the National Amusements statement, a Viacom spokesman issued a statement.
“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. We will continue to pursue the best outcome for all of Viacom’s shareholders,” the statement said.
Here is the statement by National Amusements:
Norwood MA––National Amusements, Inc., the owner of a majority of Viacom Inc.’s voting stock, today issued the following statement in response to recent press reports about negotiations over the sale of an interest in Paramount Pictures:
“National Amusements has one goal for Viacom, which is to create long-term value for all of Viacom’s shareholders. Undertaking a Paramount transaction at this time would undermine rather than advance this goal.
Paramount is one of Viacom’s most valuable assets. 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.
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.
Viacom’s bylaws require that no sale or financial transaction affecting Paramount can occur without the unanimous approval of the Viacom board. In addition, under the terms of the Status Quo Order issued by the Chancery Court of Delaware, no Paramount transaction can occur without five prior days’ notice to National Amusements. The notice period is intended to provide National Amusements with the opportunity to oppose any such transaction. If required, we will do so.”
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