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Viacom still pursuing Paramount Studios stake sale: CEO

June 09, 2016 at 04:38 pm EDT

NEW YORK (Reuters) - Viacom Inc (>> Viacom, Inc.) is still looking to sell a minority stake in its Paramount film unit, but objections from controlling shareholder Sumner Redstone have impeded the deal, CEO Philippe Dauman told investors on Thursday.

Redstone's National Amusements Inc, which holds 80 percent of Viacom voting shares, recently amended the bylaws of Viacom to require unanimous approval from Viacom's board for any deal related to Paramount Pictures.

Viacom has narrowed down the bidders for the 49-percent stake of Paramount to a small group of "global strategic partners," and had hoped to announce a deal by the end of June, but "recent events have slowed the process," Dauman told Gabelli & Company’s 8th Annual Movie & Entertainment Conference.

National Amusements said in a statement on Monday that it "is not opposed to a transaction that would unlock value at Paramount," but added that any proposed deal "should be thoroughly vetted and approved by Viacom's full board."

Viacom said at the time that the bylaw change was "completely at odds with good corporate governance."

While in the past Dauman had said that proceeds from a sale of the Paramount stake would be used to pay off debt, on Thursday he emphasized that it would also be used for strategic development, particularly internationally.

"We will unlock value of $10 or more per Viacom share if we can bring this transaction that we are working on to a successful conclusion," Dauman said, adding that the $10 would be after taxes.

"I think, I expect and I hope that we would be able to move forward with it," he said.

Dauman is suing over his removal last month from the Sumner Redstone trust that will eventually control Viacom and CBS Corp (>> CBS Corporation) as well as the National Amusements board.

In his presentation, Dauman also said Viacom was seeing high single digit price increases in ads, and mid- to high single digit increases in the volume of ad sales in this year's television upfronts.

Shares of Viacom fell 16 cents, or 0.36 percent, to close at $44.41.

(Reporting by Anna Driver and Jessica Toonkel; Editing by Nick Zieminski)

Stocks treated in this article : CBS Corporation, Viacom, Inc.

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Sumner Redstone

Sumner Murray Redstone (born Sumner Murray Rothstein; May 27, 1923) is an American businessman and is a media magnate. He is the majority owner and Chairman of the Board of the National Amusements theater chain. Through National Amusements, Sumner Redstone and his family are majority owners of CBS Corporation and Viacom (itself the parent company of MTV Networks, BET, and the film studio Paramount Pictures), and are equal partners in MovieTickets.com. According to Forbes as of March 2014 he is worth US $6.2 billion. in Boston, Massachusetts, to Belle (née Ostrovsky) and Michael Rothstein. In 1940, his father changed the family surname from "Rothstein" to "Redstone" Michael Rothstein owned Northeast Theater Corporation in Dedham, Massachusetts—the forerunner of National Amusements—and the Boston branch of the Latin Quarter Nightclub. where he completed the studies for his baccalaureate in three years. Later, Redstone served as First Lieutenant in the United States Army during World War II After this military service, he worked in Washington, D.C., and attended Georgetown University Law School. He transferred to Harvard Law School and received his LL.B. in 1947.). He invested in Columbia Pictures, Twentieth Century Fox, Orion Pictures, and Paramount Pictures (Redstone's Viacom would buy Paramount in the 1990s), all of which turned over huge profits when he chose to sell their stock in the early 1980s.

In 1979, he suffered severe burns in a fire at the Copley Plaza hotel, in Boston, but survived after thirty hours extensive surgery at Massachusetts General Hospital. Though he was warned that he might never be able to live a normal life, eight years later he was fit enough to insist on playing tennis nearly every day and to launch a hostile takeover of Viacom.

Career

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