Exclusive - Viacom lead director turned down offer for another director to meet Sumner Redstone

By Jessica Toonkel and Dan Levine

NEW YORK/SAN FRANCISCO (Reuters) - Viacom Inc's lead independent director Frederic Salerno vetoed an offer by Sumner Redstone's attorneys to have another of Viacom's independent directors meet face-to-face with the 93-year-old media mogul to get an understanding of his views on the media company, two sources familiar with the situation told Reuters on Monday.

Salerno's dismissal of a possible route toward a settlement shows how far apart the two sides are in the legal fight for control over Redstone's $40 billion media empire, amid questions over whether the magnate is making his own decisions or is even of sound enough mind to do so.

 

In the days after Salerno filed suit over Redstone's move on June 16 to oust him and four other directors, including Viacom CEO Philippe Dauman, from the Viacom board, Redstone offered to meet with Viacom independent director Charles Phillips, the sources said.

Last week Salerno vetoed the idea, opting instead to continue with litigation, the sources said.

A spokesman for Redstone could not immediately provide comment. Viacom and Phillips declined comment.

For investors, the impasse could mark the beginning of a long legal battle that will prolong the uncertainty over the future of Viacom. The company's shares closed down 5.1 percent on Monday, in a broadly lower market.

Redstone's privately held movie holding company, National Amusements Inc, owns 80 percent of the voting shares of Viacom as well as CBS Corp . On June 16, when National Amusements moved to oust the five directors from the board, investors told Reuters they hoped a change in management or a merger between CBS and Viacom could be on the horizon.

On the same day, National Amusements asked a Delaware court to affirm the changes, while Salerno shot back with his own suit seeking to block the move, calling it calling it "invalid" and the result of Redstone's daughter Shari Redstone manipulating her father.

A Delaware judge said last week that he would schedule a hearing in July in a case about whether National Amusements' move was valid.

(Reporting by Jessica Toonkel in New York and Dan Levine in San Francisco; Editing by Bill Rigby)