Viacom settlement talks resume: source
FILE PHOTO: Sumner Redstone, executive chairman of CBS Corp. and Viacom, arrives at the premiere of 'The Guilt Trip' in Los Angeles December 11, 2012. REUTERS/Fred Prouser
Get instant alerts when news breaks on your stocks. Claim your 2-week free trial to StreetInsider Premium here.
By Jessica Toonkel and Dan Levine
(Reuters) - Settlement talks between Viacom Inc (NASDAQ: VIAB) Chief Executive Philippe Dauman and controlling shareholder Sumner Redstone have resumed after weeks of stops and starts, a source familiar with the situation told Reuters on Tuesday.
Settlement terms discussed include allowing Dauman to present to the board his plan to sell a stake in Paramount Pictures in exchange for his exit, according to two other sources, who requested anonymity because negotiations are confidential.
Dauman would be replaced by Viacom Chief Operating Officer Tom Dooley on an interim basis, the sources said, confirming earlier media reports.
A settlement would end litigation in Delaware and Massachusetts over the battle for control over 93-year-old Redstone's $40 billion media empire. Dauman's exit would be welcome news to Viacom shareholders who have hoped for change at the top of the company, whose ratings and advertising revenue have fallen sharply.
Under Dauman, shares of the parent of cable networks MTV and Comedy Central have tumbled more than 40 percent over the last two years.
On Tuesday evening, The LA Times reported that settlement talks had accelerated. The Wall Street Journal, citing people familiar with the situation, reported that one sticking point was when directors would leave Viacom's board.
Representatives for Viacom and National Amusements Inc, Redstone's privately held movie theater company, declined to comment.
Redstone in May removed Dauman and board member George Abrams from Sumner M. Redstone National Amusements Inc Trust, which would control Viacom and CBS Corp (NYSE: CBS) when the billionaire dies or is incapacitated.
In June, Redstone took steps to remove Dauman, Frederic Salerno and three other directors from Viacom's board.
Dauman and Salerno, who claim that Redstone is being manipulated by his daughter Shari Redstone, contested their removals in separate lawsuits in Massachusetts and Delaware. She has denied those charges.
A spokeswoman for Shari Redstone declined to comment.
Dauman's employment contract runs through the end of 2018. Under the terms of the agreement, he is eligible to receive up to $72 million in cash if he is terminated without cause or he resigns "with good reason," according to regulatory filings by the company. He could potentially receive nearly $90 million in severance, according to compensation consultant Equilar.
A Massachusetts judge has set a Sept. 19 trial date for the litigation over Dauman's removal from Redstone's trust while Salerno's case is scheduled for trial in October.
(Reporting by Jessica Toonkel; Editing by Richard Chang)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Viacom (VIAB) said close to naming Bakish as Interim CEO - Bloomberg
- Russia says its planes, and Syria's, have not flown over Aleppo for nine days
- Samsung Electronics vows mobile rebound, dangles buyback after Note 7 shock
Create E-mail Alert Related CategoriesLitigation, Reuters
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!