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 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 were down 92 cents, or 2 percent at $43.65.