Viacom investors look beyond Dauman, betting on suitors
By Jessica Toonkel and Ross Kerber
(Reuters) - Media investors are looking beyond the legal battle between the Redstone family and Viacom Inc VIABO> CEO Philippe Dauman, speculating that a deal for the $18 billion media conglomerate could be on the horizon.
Last month, Sumner Redstone, 93, the controlling shareholder of Viacom and CBS Corp CBS.N, changed key members of his seven-person trust that will take over his majority voting stake of CBS and Viacom when he dies or is deemed incapacitated, and he signaled he may dismiss the Viacom board and Dauman.
That led to new allegations, this time from Dauman, that the home-bound mogul is mentally incompetent. In a previous lawsuit filed by a former Redstone girlfriend, Dauman testified that Redstone was "engaged" and "alert."
There is no evidence that a deal for Viacom is in the works. Still, investors have bid up shares of Viacom about 16 percent since May 20 when Redstone removed Dauman from the seven-person trust that will eventually control CBS and Viacom.
A Viacom spokesman and a spokesman for Sumner Redstone declined to comment. A spokeswoman for Redstone's daughter, Shari Redstone, declined to comment. Shari Redstone, who sits on her father's trust, opposed Dauman's elevation to Viacom executive chair earlier this year.
Dauman is fighting his ouster from the trust in court, asserting that Redstone's diminished mental capacity left him vulnerable to his daughter's improper influence. But many investors expect he will leave Viacom.
“I don’t see how he would stick around,” said Ben Strubel, a principal with Lancaster, Pennsylvania-based wealth manager Strubel Investment Management, which owns non-voting shares of Viacom.
The thinking among investors is that if Dauman leaves, Viacom's fate would be in play. Continued...