Chinese billionaire Wang Jianlin's Dalian Wanda Group Co is in talks to buy 49 per cent of Paramount Pictures from Viacom Inc, which is pressing ahead with a deal despite opposition from its biggest shareholder, the Wall Street Journal reported, citing unidentified people familiar with the matter.
Viacom is seeking a valuation of $8 billion to $10 billion for Paramount, the Journal reported on Thursday, citing one unidentified person. The discussions are advanced and Viacom Chief Executive Officer Philippe Dauman began negotiating exclusively with Wanda, the Los Angeles Times reported, citing an unnamed person.
Reuters first reported on the talks with Wanda. All three reports said the discussions face hurdles. Representatives at Viacom and Wanda declined to comment.
If a deal is concluded, Paramount would build on Wang's expansion into Hollywood after Wanda agreed to buy Legendary Entertainment earlier this year. It would be the latest addition to a burgeoning entertainment empire that includes movie-theatre screens, theme parks and sports assets.
But that's a big if. Viacom is locked in a three-state legal battle for control of the company that pits Dauman against his former mentor, controlling shareholder Sumner Redstone, who could potentially veto any deal. Under a Delaware court ruling, Viacom must give Redstone five days' written notice before making any moves involving Paramount.
In court filings and in public statements to the press, Redstone and his daughter Shari have said they've been denied information about the Paramount sale process. Sumner Redstone has said he's opposed to the sale of the studio which he has called "my baby".
Redstone, 93, is trying to remove Dauman and George Abrams, another former confidante, from a family trust that will one day oversee his affairs. He's also sought to eject them from the board of his National Amusements Inc holding company and from their roles at Viacom, the owner of MTV and Comedy Central, in addition to Paramount.
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DIFFICULT ROAD AHEAD Viacom is seeking to sell a stake in Paramount to reduce debt and boost production. A deal with Wanda would give the company a strategic partner in faster growing Asian markets. If a deal is concluded, Paramount would build on Wang’s expansion into Hollywood after Wanda agreed to buy Legendary Entertainment earlier this year. But the deal is locked in a legal tussle: |
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Redstone controls almost 80 per cent of the voting stock at Viacom and has a similar stake in CBS Corp.
Dauman contends Redstone is no longer mentally competent to make such decisions and alleges he's being improperly influenced by his daughter, Shari Redstone. Dauman is suing in Massachusetts, where the Redstone trust was executed, and in Viacom's corporate domicile of Delaware. Redstone is seeking to have the litigation take place in California, where he lives.
Viacom is seeking to sell a stake in Paramount to reduce debt and boost production. A deal with Wanda would give the company a strategic partner in faster growing Asian markets.
