The media conglomerate’s shares rose 2.1 percent Wednesday, to $43.74, on renewed speculation that settlement talks between controlling shareholders and Chief Executive Philippe Dauman will result in his ouster.
Advertisement
Viacom’s board is meeting Thursday night to discuss the settlement, the people said.
The fight over Sumner M. Redstone’s $40 billion media empire appears to be over.
The shareholders, Sumner Redstone and his daughter, Shari, who control 80 percent of the entertainment giant’s votes through the family-owned National Amusements Inc., have been pressing to oust Dauman from the family trust and the Viacom board.
Mr. Dauman, who would be due an exit package valued at around $72 million, would remain as nonexecutive chairman until September 13 and would have a chance to present plans to sale a stake in Paramount Pictures to the board, the people familiar with the situation say. Another area of negotiation has been around whether to allow Dauman to present to the board his plan to sell a stake in Paramount Pictures in exchange for his exit, the sources said. Under the terms of the agreement, he is eligible to receive up to $72 million in cash if he is terminated without cause or he resigns “with good reason”, according to regulatory filings by the company.
Viacom directors, including Dauman and George Abrams, who are also members of a Redstone family trust, have challenged the 93-year-old patriarch’s mental competence and have alleged in court that he is being unduly influenced by Shari Redstone. A spokesman for Mr Redstone said the media mogul had been unhappy with the company’s performance and about Mr Dauman’s plans to sell a stake in Paramount Pictures. But Messrs Dauman and Abrams argued that he wasn’t mentally competent when he made those decisions, and is being manipulated by his daughter.
Separately, Viacom’s lead independent director, Frederic Salerno, filed suit in a DE court to block National Amusements from replacing five board members, including Messrs.
While Dauman has advocated the deal, Redstone’s National Amusements holding company has opposed the transaction and the board is unlikely to approve it. It is unclear when the directors that National Amusements moved to replace will leave the board.
Dauman’s contract would let him walk away with compensation that was valued at $83 million as of June, according to the Bloomberg Pay Index.
Thomas May, chairman of Eversource Energy, is expected to be named chairman after Mr. Dauman leaves that role.
Advertisement
Shares of Viacom have fallen around 50 per cent in the past two years as its cable networks, including MTV and Nickelodeon, suffered from falling ratings because younger viewers were migrating online and to mobile video.
