Paramount stake sale is unlikely

Former Viacom Chief Executive Philippe Dauman’s controversial plan to bolster Viacom’s finances by selling a 49% interest in Paramount Pictures appears doomed.

As part of a settlement agreement that paved the way for Dauman’s departure from Viacom, the former chief retained the ability to present his Paramount plan to Viacom’s board. Dauman invested considerable energy this year lining up an outside investor, believed to be Dalian Wanda Group of China, to buy a chunk of Paramount.

Dauman had hoped that fetching a huge sum — perhaps as much as $4 billion for nearly half of the Melrose Avenue movie studio — would boost Viacom’s stock price.

But now, instead of making a formal presentation to Viacom’s board, Dauman is expected to submit a written proposal that outlines the plan, according to two people close to Viacom who asked not to be identified discussing board matters.

Viacom’s board is scheduled to meet Sept. 14. Dauman officially steps down as non-executive chairman of Viacom on Sept. 13.

Dauman’s Paramount proposal is almost certain to be defeated. The retrenchment underscores the long odds that Dauman always faced in pulling off a hoped-for sale. Ailing Sumner Redstone, 93, strenuously opposed the plan to sell a stake in what he has long considered to be the jewel in his $40-billion media empire. His daughter, Shari Redstone, also has been opposed to selling such a large stake in Paramount because of concerns that such a sale might complicate, or even derail, a larger Viacom transaction, such as reuniting Viacom and CBS Corp. into one company.

The Redstone family demanded that any proposal to sell a piece of Paramount would need the unanimous approval by the Viacom board. Because both Sumner and Shari Redstone serve on the board, achieving a unanimous vote would be impossible.