The strange story of Sumner Redstone’s battle with Viacom’s execs and directors just became a little stranger.
The board’s Lead Independent Director, Frederic Salerno, released a letter to the company’s controlling shareholder, who’s 93, hoping that “those around you will read it to you and that you can see the complexity of the issues confronting us.” He’s specifically concerned about the objections from Redstone’s camp — including his daughter Shari, who’s Viacom’s Vice Chair — to a plan by CEO Philippe Dauman to sell a 49% stake in Paramount.
“Last week they staged a drive for you, with Shari, to the Paramount studio for a brief visit in which you didn’t get out of your car,” the letter says.
Salerno says it’s “alarming that your representatives refuse us the opportunity to talk with you, express our perspectives, share our friendship, or understand directly from you what your wishes might be and why.”
Dauman “hasn’t been allowed to meet with you since early March. And we are quite concerned that your voice – and views – are not being heard.”
Board members “want to understand what is happening with you. And I can assure you that you can count on us to stick up for you and for the many other Viacom shareholders you have served so well for so many years.”
On May 20 Redstone’s lawyers sent a letter to Dauman and director George Abrams saying that their client had fired them from his family trust and the board of National Amusements, which owns 80% of Viacom’s voting shares.
Dauman and Abrams now want a Massachusetts court to rule that Redstone is “subject to mental impairment” and incapable of governing his own affairs — charges the Redstone camp rejects.
Here’s today’s letter in its entirety:
I write to you as your long-time friend, as a director you have elected to the Viacom board 22 times, and as lead independent director of the Company. I am making my letter public in the hope that those around you will read it to you and that you can see the complexity of the issues confronting us.
You and I have worked together for decades to create shareholder value and develop shareholder trust. Over that time, many issues and differences have arisen. Working closely with the other members of the Board, we have addressed each of them with thoughtful dialogue and careful calibration across a variety of interests.
Strangely, in the last few months, a host of new advisors and spokespeople say they work for you. They claim that strongly held views you have expressed for decades have, in the past few months, completely reversed. They say you no longer trust your friends, your advisors, or your board. They tell us to believe that you have put your daughter Shari in charge of your trust and your board at National Amusements despite your clearly stated wishes and planning over many years that are to the contrary. A new law firm never before associated with you recently delivered a notice claiming you amended Viacom’s bylaws, taking away significant responsibilities from your board. They tell us that you are well and getting better every day. Last week they staged a drive for you, with Shari, to the Paramount studio for a brief visit in which you didn’t get out of your car.
Sumner, we sincerely hope you are doing well. But it is alarming that your representatives refuse us the opportunity to talk with you, express our perspectives, share our friendship, or understand directly from you what your wishes might be and why. Bill Schwartz and I have not been permitted to see you, despite repeated requests. Philippe hasn’t been allowed to meet with you since early March. And we are quite concerned that your voice – and views – are not being heard. When your phone is dialed into our board calls from your home, no one says a word. When we ask for your vote, all we hear is silence.
Statements from these people suggest you think we intend to sell Paramount lock, stock, and barrel, or that we would do it in the middle of the night and hide it from you. Nothing could be further from the truth. You may remember that in February, Philippe spoke to you at your home about new opportunities that could strengthen Paramount. He reported that you didn’t react, other than to nod when he asked you if you heard him and understood what he said to you. You may recall that a few days later, Philippe spoke about possibilities of a transaction at a special informational telephonic session of all of the members of the board, and you were dialed in. All of the board members except you spoke up, and the board supported exploring the possibilities further without dissent.
As of right now, Philippe and his team are busy exploring whether a transaction might be possible and how much value it would bring. Just last week, he said at a public conference that partnering with a new strategic investor could unlock a net after-tax value of approximately $10.00 per share of Viacom. If a transaction can be negotiated that creates value for the shareholders, you can be sure it will be presented to the entire board, including to you and to your daughter, Shari, and you will be given a full briefing and ample time to consider it. In the meantime, it is important for all shareholders that we are able to pursue this investigation without any new obstacles that may cause potential investors to shy away from the process.
Sumner, they tell us they won’t make you available for fear that such a meeting would become the source of more litigation. In reality, putting up a wall around you ensures more litigation – and that is not what we want. We want to understand what is happening with you. And I can assure you that you can count on us to stick up for you and for the many other Viacom shareholders you have served so well for so many years.
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