Viacom Directors Prepare For Sumner Redstone Move To Replace Them: Report
UPDATE: Sumner Redstone’s camp didn’t directly address the report that he will try to replace Viacom’s board, and CEO Philippe Dauman. But it just said that the Chairman Emeritus “will make every decision with the same deliberation and consideration with which he removed Philippe Dauman and George Abrams as trustees, based on the best interests of shareholders.”
PREVIOUS, 7:05 AM: Sumner Redstone may celebrate his 93rd birthday today by blowing up Viacom’s management, possibly leading to another bitter court battle over his competency, CNBC’s David Faber reports this morning.
He says
that Viacom’s board is bracing itself to hear that its Chairman Emeritus, whose National Amusements controls about 80% of the stock, is preparing to replace the entertainment giant’s board.
The first step would be to call a shareholder meeting. The outcome would not be in question: Redstone owns 80% of National Amusements’ shares, and his daughter, Shari, has the remaining 20%.
If that happens, then Viacom reportedly is ready to ask a court in Delaware, where the company is incorporated, to immediately hear a case seeking to block the effort.
The case could be more complicated than the ones in Massachusetts and Los Angeles involving CEO Philippe Dauman and board member George Abrams — who Redstone fired last week from his trust and the National Amusements board.
They charged that Redstone has lost his ability to reason, and is being manipulated by Shari, who’s President of National Amusements and Vice Chair of Viacom and CBS.
But a move by National Amusements would be made by its board — not just Sumner Redstone. It would be harder to prove that the group was behaving irrationally.
Viacom shares are up 3.5% this morning following the CNBC report. The stock has appreciated more than 12% over the last five days after Redstone moved against Dauman and Abrams.
Meanwhile, Viacom Lead Independent Director Fred Salerno is trying to arrange a meeting with Sumner Redstone.
In a message to his lawyer yesterday, Salerno said that he “should have unfettered and unfiltered access, which has always been Sumner’s policy in the past.”
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