Viacom’s CEO Philippe Dauman, locked in a battle with Sumner Redstone to retain his position, discussed the planned Paramount sale Thursday. Dauman told investors such a transaction makes sense.
A strategic Paramount deal could unlock $10/share (or more) in after tax equity value, according to Dauman. Speaking at an investor conference, he said Viacom started with 40 players interest in Paramount, but has since narrowed down the group to major global strategic players.
Originally the company hoped to wrap up a deal by the end of this month but Redstone’s move to amend the bylaws requiring full board approval of such a sale, has caused the end date to “slip,” but management is still pursuing it, according to a report from Wells Fargo Marci Ryvicker.
“The transaction would be designed to include a 49% investor that would create more value operationally than if Paramount went at it alone (similar to VIAB’s partnership in India), and it would be a tax efficient deal. Proceeds could be used to pay down debt and get back well within its investment grade target, and capital could also be deployed internationally if opportunities present themselves,” Ryvicker writes in a client report.