Wanda in talks to buy 49% of Viacom's Paramount

Redstone controls Viacom and CBS Corp. via National Amusements, and a representative said the mogul concurs with the statement.

According to Bloomberg, Viacom's CEO, Philippe Dauman is in the midst of negotiations with Chinese billionaire Wang Jianlin's Dalian Wanda Group Co.to sell nearly half the company's holding in the Hollywood studio.

In court filings and in public statements to the press, Redstone and his daughter Shari Redstone have said they've been denied information about the Paramount sale process.

But some investors have grown increasingly hopeful that a bigger deal involving all of Viacom might be in the works.

Viacom, for its part, accused the Redstones of meddling.

Paramount is one of Viacom's most valuable assets.

Last month, National Amusements moved to dump Dauman and four other Viacom board members - although that effort was put on hold to allow a judge in DE to determine whether the board changes were valid.

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"National Amusements has one goal for Viacom, which is to create long-term value for all of Viacom's shareholders".

He also said, Paramount has been "at a competitive disadvantage that we believe will take years to change" because of Viacom's under-investment.

Selling a Paramount stake is bad for shareholders and even limits other strategic options, National Amusements says in a 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". Dauman has said the divestiture would unlock value of $10 or more per Viacom share and that he would use the proceeds from a sale to pay off debt and for strategic development, particularly overseas.

The stock is down about 40% from levels seen two years ago. But there could be a major obstacle standing in the way of a deal, namely its controlling.

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. In addition, Viacom must give National Amusements a five-day notice before trying to consummate any deal. The notice period is meant to provide National Amusements with the opportunity to oppose any such transaction.

Paramount is reported to have received interest from several buyers for the 49 per cent stake in the struggling studio, but interested parties have shied away from buying a minority stake, preferring to buy the whole studio. This month, Paramount releases a big bet with a "Star Trek" movie from J.J. Abrams.

(Copyright © 2015. All Rights Reserved.)
 
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