On Thursday, Viacom (NASDAQ: VIAB) CEO Philippe Dauman spoke with investors and told them that the company is still trying to obtain a deal with selling its stake in Paramount Pictures. Viacom Inc. is facing objections from its controlling shareholder Sumner Redstone who has impeded the deal. Dauman originally want to sale to be completed by the end of the month but the ongoing legal drama has prevented it from happening.
"Naturally, recent events have slowed down the process," Dauman said at Gabelli & Co.'s annual Movie & Entertainment Conference. "Our original target of the end of June is going to slip. We are going to continue to explore the potential for unlocking value with select partners with strategic value."
On Tuesday, June 7, 2016 there was a hearing with which included CEO Dauman and Viacom board member George Abrams. The two executives argue in their lawsuit that they shouldn’t be removed from Redstone’s trust which will control Viacom and Redstone’s other media company, CBS (NYSE:CBS) after he dies or is incapacitated. Both Dauman and Abrams filed a motion to expedite the lawsuit. They are requesting a medical examination to determine the elder Redstone’s mental competence. According to Yahoo Finance Redstone’s representatives say that the elder Redstone has the capacity to look over operations of the business and that Dauman and Abrams was removed from the trust over their performance. Both Dauman and Abrams believe it was done by Redstone’s daughter, Shari. She accuses them of manipulating Sumner Redstone.
At a hearing in Boston and attorney for Redstone said that the two executives were booted from the trust because of Viacom wanting to sell the stake in Paramount. Robert Kliegar, the attorney for Redstone, told the court that Redstone didn’t want the Viacom board to go through with the sale.
According to CNN, Redstone’s National Amusement owns 80% of Viacom’s voting stock and changed it bylaws this week which requires full approval from the Viacom board before selling any stake in Paramount.
According to Yahoo Finance, National Amusements released a statement on Monday which said 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.”
A Viacom spokesperson spoke with CNN and described the changing of the bylaws as “illegitimate” and “completely at odds with good corporate governance.”
According to Yahoo Finance, Dauman previously stated that the sale of the Paramount Stake would be used to pay off debt. On Thursday he added that the sale would be used for strategic development more focused internationally.
Dauman told Yahoo Finance that,"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 further added that 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.