Is Sumner Redstone opposed to the sale of a minority stake in Paramount? You’d sure think so based on a Wall Street Journal story posted late today that describes the background of the close relationship between Redstone, who controls 80% of Viacom’s voting shares, and its CEO Philippe Dauman.
It says that after the CEO announced in February the plan to sell a minority stake in Paramount, Redstone told Dauman, Paramount chief Brad Grey and others that he opposed the plan.
Citing “people familiar with the matter,” the Journal quotes Redstone as saying “I don’t want to sell Paramount.”
Earlier, when Dauman presented the proposal to Redstone, he “thought he heard ‘yes’,” the story says. Redstone, who’s 92, has trouble speaking.
A Viacom spokesman says the sale process “continues,” but declined to comment on what Redstone did, or didn’t, say about the sale effort.
The decision is up to Viacom’s board, even though Redstone is the controlling shareholder. It discussed the idea at two meetings and nobody, including Redstone, opposed.
Dauman’s disclosure about the potential sale of a non-controlling stake pleased Wall Street. But the impact on the stock was short lived as Paramount saw disappointing box office sales for Zoolander 2 and Whiskey Tango Foxtrot.
Speculation about a potential buyer of the minority stake has centered on overseas firms including DMG Entertainment, Alibaba, and the Dalian Wanda Group (which owns AMC Theaters).
Meanwhile, Dauman has been tangled with a messy lawsuit by Redstone’s former companion Manuela Herzer. She had been in charge of the mogul’s health care until October, when she was replaced by Dauman. Herzer charged that Redstone was a “living ghost,” and incapable of making the decision.
A deposition of Dauman was canceled as the two sides work on a potential settlement that would turn the health care decisions over to Redstone’s daughter, Shari.