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Media mogul Sumner Redstone to sell nearly $1 billion in stock, maintains empire

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Sumner Redstone's family-controlled firm, National Amusements Inc., this morning said it was selling nearly $1 billion in stock in CBS Corp. and Viacom Inc. to help retire the enormous debt that once threatened to upend the 86-year-old mogul's media empire -- and his legacy.

National Amusements plans to sell about $600 million in Viacom shares and $345 million in CBS stock as well as some other "non-core assets," according to a statement from Redstone's Dedham, Mass., firm. The company did not identify what those additional assets might be, although a person close to the situation said that those include theaters outside of New England and New York.

"NAI will be in a position to pay off all of its existing creditors in full," the company said in the statement. The firm has $1.46 billion in debt and faces a $500-million payment by the end of this month.

Even with the stock sale, Redstone will maintain his controlling interest in both CBS and Viacom. He will primarily sell the nonvoting B shares of the two companies.  Redstone  is also planning to keep National Amusements' theaters in the United Kingdom, Brazil and its "core theater assets" in the United States.

Until recently, Redstone had planned to unload most of the firm's movie theaters.  But recent dramatic gains in the value of CBS and Viacom stock allowed him to come up with the money without dismantling his empire. Viacom shares have doubled in value since March, and CBS shares have tripled in value during the same period. Those gains allowed Redstone to preserve the company's most significant holdings. 

"As a result of our actions, National Amusements will be out of debt with its existing creditors and will still control its most important assets," Redstone said in the statement.

-- Meg James

Related:

Sumner Redstone to unload 35 theaters including L.A.'s Bridge to help pay down debt (3:13 PM today)

Sumner Redstone's financial picture brightens (Today's print edition)

Photo: Sumner Redstone. Credit: Alberto E. Rodriguez / Getty Images

 
Comments () | Archives (5)

UBS says this is no big deal. That is because they just upgraded CBS and they need to keep this stock up. This is all a joke. Investors are going to get hurt here if they buy CBS in here. If Redstone thought there was more upside he wouldn't of sold after he told everyone he wouldn't. Plus CBS was hyping that things are much better, yet they never upped there out look just reaffirmed it.

JP Morgan ups CBS and sells its shares on the underwriting side. Who bought it up here?

Did I mention CBS's debt??

I have no idea who would buy more of the Viacom B stock. They are currently in trouble and once Sumner is gone, there is no clear succession plan. I just don't get it.

It matters not what bankers or investment houses have to say.

It is no secret Sumner was burdened with too high a leverage on his private holdings coupled with his need for estate planning, it is indeed fortunate on his part that current share prices are above expectations.

We are but mere mortals but by comparisons, Sumner Redstone must go down in history as a whale of an investor. He's bought a few lemons but overall, has done very well for himself and family.

I just don't get it.

He definitely needs the money. He's currently staying at my house and he needs to leave... soon.

http://mankabros.com/chairmans-blog/2009/10/sumner-redstone-is-staying-at-1.html


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