Redstone Opposes Dauman’s Sale of Paramount Stake

Mogul regrets CEO’s ‘attacks’ and ‘misrepresentations’
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Media mogul Sumner Redstone issued a statement criticizing long-time lieutenant and Viacom CEO Philippe Dauman and Viacom’s plan to sell a stake in Paramount Pictures.

He also made it clear he believes Viacom faces “continuing challenges” and will “continue to act in what he believes are the best interests of Viacom shareholders,” according to a statement released Sunday on his behalf.

Dauman on Friday was removed as a trustee of the trust that will control Redstone’s assets after the 92-year-old dies or becomes incapacitated. Those assets, including 80% voting interests in Viacom and CBS, are worth $40 billion.

Dauman recently testified in a lawsuit challenging Redstone’s competency to make healthcare and financial decisions, saying that they had conversations and that Redstone was “engaged and attentive.” After being removed, Viacom has made statements about Redstone being under the “undue influence” his daughter Shari Redstone.

Shari Redstone opposed Dauman replacing Sumner Redstone as chairman of Viacom and appears to be Dauman’s rival to control the mogul’s assets after he passes.

“These steps are invalid and illegal,” Dauman said in a statement via a spokesman. “They are a shameful effort by Shari Redstone to seize control by unlawfully using her ailing father Sumner Redstone’s name and signature.”

Because of age and illness, Sumner Redstone can not speak clearly, making it difficult to understand his wished. But during the recent competency lawsuit, Redstone was able to make it clear to a judge that he wanted the former company would brought the suit out of his life.

In his new statement, Redstone makes it clear he still has strong opinions about how Viacom should be run.

Viacom’s directors have claimed they’ve been unable to meet with Redstone and that his actions are out of character, but Redstone said he is not “isolated” and requested a briefing on Viacom’s management’s plans and received no response.

Redstone said that he believes that Paramount should remain wholly owned by Viacom unless Viacom’s board presents a “concrete plan” that convinces him otherwise.

“Viacom’s false and unfair statements to the media, as well as Mr. Dauman’s opportunistic claims of incapacity, now make it problematic to move forward with any direct meeting and briefing as Mr. Redstone had previously requested.  However, Mr. Redstone remains intent on receiving the briefing through his advisers -- a request that still has not been responded to despite Mr. Redstone’s rights as a director,” said Redstone’s statement.

Mr. Redstone regrets that Mr. Dauman has diverted resources to these baseless attacks and misrepresentations, rather than focusing on the continuing challenges that are faced by Viacom,” the statement said. “Mr. Redstone will continue to act in what he believes are the best interest of Viacom’s shareholders.”

Viacom countered with a statement from a spokesman.

"We continue to be deeply troubled and saddened by this state of affairs. We have the deepest respect for Sumner Redstone, but it is clear he is being shamefully manipulated. The facts are clear. Viacom’s 12-hour strategy meetings on May 17 and 18, that Sumner attended by phone, addressed all issues, including Paramount, to the satisfaction of all the independent directors,” the statement said.

‘Despite numerous requests, Lead Independent Director Fred Salerno and a fellow board member, who represent all shareholders, have still been unable to meet with Mr. Redstone. The Sumner Redstone we knew would never refuse a meeting about his businesses and he certainly would not want advisors to stand in for him. Mr. Salerno and his fellow Directors remain willing and eager to meet with Sumner at any time."

Here’s is the full text of the statement on behalf of Sumner Redstone:

LOS ANGELES, May 22, 2016— Sumner Redstone would like to correct some false and unfair information issued this weekend in a statement from Viacom.

Access to Sumner Redstone by Viacom’s Board of Directors

Viacom’s claim that members of the board have been “denied access” to Sumner Redstone is untrue. In a letter sent on May 16 by his counsel to Viacom’s CEO Phillippe Dauman and board members George Abrams and Frederic Salerno, Mr. Redstone asked to be briefed concerning management’s plans for improving Viacom’s business outlook and share price. This was an opportunity for direct engagement, but the board leadership did not respond. Instead, Viacom criticized Mr. Redstone for not speaking while participating by phone in a board meeting that followed. As Viacom knows well, Mr. Redstone has significant speech impairment and, for much of the past two years, has not relied on verbal statements at board meeting to make his opinion known.

Independence of Mr. Redstone

Viacom’s statement claimed that Shari Redstone has “isolated” her father, putting his residence “on lockdown.” These claims are false as well. Over the past several days alone, Mr. Redstone has hosted family and friends at his home, and met with several attorneys and an executive from National Amusements. He also visited his grandson’s home to watch a baseball game and is looking forward to celebrating his birthday with family later this week.

Viacom implied Shari Redstone played a role in choosing Mr. Redstone’s legal counsel. That statement is false. In fact, neither that counsel nor his firm has ever before represented any member of the Redstone family. The counsel was recommended to Mr. Redstone by his existing lawyers, and Mr. Redstone has met with and is working closely with his new counsel.

Sumner Redstone remains today as Phillippe Dauman described him less than six months ago:  “engaged, attentive, and as opinionated as ever.”  He removed Mr. Dauman and George Abrams as trustees of the Sumner M. Redstone National Amusements Trust and as directors of National Amusements, Inc. based on what Mr. Redstone believes are the best interests of beneficiaries and shareholders.

Viacom’s false and unfair statements to the media, as well as Mr. Dauman’s opportunistic claims of incapacity, now make it problematic to move forward with any direct meeting and briefing as Mr. Redstone had previously requested.  However, Mr. Redstone remains intent on receiving the briefing through his advisers -- a request that still has not been responded to despite Mr. Redstone’s rights as a director. 

Unless Viacom’s board presents a concrete plan that convinces him otherwise, Mr. Redstone continues to believe that it is in the best interest of Viacom that Paramount Pictures should remain wholly owned by the parent company. 

Mr. Redstone regrets that Mr. Dauman has diverted resources to these baseless attacks and misrepresentations, rather than focusing on the continuing challenges that are faced by Viacom.  Mr. Redstone will continue to act in what he believes are the best interest of Viacom’s shareholders.

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