Selling a chunk of Paramount Pictures to China’s Dalian Wanda Group would “undermine” long-term value at the Viacom-owned studio, according to National Amusements.
The battle for the future of Viacom and its subsidiary Paramount reached its latest stage late last week when Viacom owner NA released a statement warning a deal would damage value for shareholders in the long-term.
It emerged last week that Dalian Wanda, which owns National Amusements theatre chain rival AMC Entertainment and Colony producer Legendary Entertainment, was the potential buyer of a 49% stake in the studio, which is behind some of the world’s top grossing movies.
Describing Paramount, which includes TV arm Paramount Television, as “one of Viacom’s most valuable assets”, NA claimed: “National Amusements has one goal for Viacom, which is to create long-term value for all of Viacom’s shareholders. Undertaking a Paramount transaction at this time would undermine rather than advance this goal.”
Viacom’s management team, led by under-fire CEO Philippe Dauman, has claimed selling half of Paramount would create significant near-term shareholder value.
It claims 93-year-old NA owner Sumner Redstone is being manipulated by his daughter, Shari Redstone, who has publicly criticised Dauman and other executives. Dauman, Viacom’s lead independent director Fred Salerno, George Abrams, Blythe McGarvie and William Schwartz were recently reinstated to the board on an interim basis while a court considers the Paramount plan.
Viacom responded to NA’s latest salvo by releasing its own statement. “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,” it said. “We will continue to pursue the best outcome for all of Viacom’s shareholders.”
NA’s statement claimed “any short-term benefits that might result from a Paramount transaction would be outweighed by the severe negative impact on Viacom’s future strategic flexibility to best capitalise on this important asset”.
It added the new Viacom board, many of whom were appointed to replace Dauman and his supporting directors, should “have the opportunity to carefully review any proposed Paramount transaction”.