National Amusements has clarified that it is not opposed to a transaction that would unlock value at Paramount. However this comes with a rider of the deal should be unanimously approved by Viacom’s board, which could be an impossible task.
Viacom’s CEO, Philippe Dauman told investors that the company is still looking to sell its stake in Paramount. Objections from Sumner Redstone have however blocked the deal.
Redstone’s National Amusement Inc., which has a controlling stake in Viacom’s voting shares, has recently amended Viacom’s bylaws so as to require an unanimous approval from Viacom’s board for any deal related to Paramount Pictures.
However, Viacom has narrowed down the number of bidders to a small group of “global strategic partners,” for the sale of the 49% stake in Paramount Pictures. It hopes to announce a deal by the end of June, however, Dauman went on to add that “recent events have slowed the process”.
In a statement released earlier this week, National Amusements said that it “is not opposed to a transaction that would unlock value at Paramount,” however, any deal “should be thoroughly vetted and approved by Viacom’s full board.”
A propos the recent amendments to the company’s bylaws, Viacom said it was “completely at odds with good corporate governance.”
Although in the past Dauman had stated that the sale proceeds from the proposed sale of its stake in Paramount Pictures would be used to pay off debt, on Thursday he emphasized that it would also be used for strategic development, especially 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,” said Dauman, adding that the $10 would be after taxes.
He went on to add, “I think, I expect and I hope that we would be able to move forward with it”.
To buttress his point, during his presentation Dauman said Viacom was seeing high single digit price increases in advertisement revenues from television. The volume of ad sales in this sector has also increased by mid to high single digit.
Viacom’s shares fell by 16 cents to close at $44.41.