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Redstone firm comes out against Paramount stake sale

17 July 2016
Redstone firm comes out against Paramount stake sale

Sumner Redstone, executive chairman of Viacom Inc and CBS Corp, poses for a photo after answering questions at the Milken Institute Global Conference in Beverly Hills, California, U.S. May 2, 2012. Other parties besides Wanda have also expressed an interest in Paramount, and there is no certainty any deal will be reached, the people said this week.

Ailing media mogul Sumner Redstone and his daughter Shari Redstone hold 80 per cent of voting shares of Viacom as well as CBS through their family investment vehicle, National Amusements.

Shari Redstone spokeswoman Nancy Sterling and Sumner Redstone spokesman Mike Lawrence declined to comment.

"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", a Viacom representative said Friday.

Viacom is seeking to have Redstone declared incompetent to block his moves to oust several member of Viacom's board of directors, including company CEO Philippe Dauman. Sumner Redstone has said he's opposed to the sale of the studio which he has called "my baby".

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.

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

Viacom responded with a statement of its own, accusing National Amusements of meddling in the company's operations.

"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", National Amusements said.

Dauman for a while gas shown eagerness in selling a stake in Paramount to increase share price of Viacom, prior to announcing the company's earnings report in August.

And many analysts have continued to praise the idea of a sale in recent weeks.

Dauman hopes that fetching a big price for the studio interest - perhaps as much as $5 billion - would give a bounce to Viacom's sagging stock price.

China's swelling middle-class consumers, and their demand for entertainment, are seen as one of the key profit drivers for production studios and theater chains globally.