Media mogul Sumner Redstone to sell nearly $1 billion in stock, maintains empire
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
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Photo: Sumner Redstone. Credit: Alberto E. Rodriguez / Getty Images