Redstone: 'I'm Not Selling'10/24/2008 8:00 PM Eastern
After a rough week where speculation was high that he may have to sell off one of his major media holdings, Viacom and CBS chairman Sumner Redstone vowed that his grip on the media giants would remain tight.
According to a report in The Wall Street Journal, Redstone said that he would sell no more Viacom or CBS stock.
The speculation arose from an Oct. 13 filing with the Securities and Exchange Commission that Redstone was forced to sell about $233 million worth of Viacom and CBS stock held by National Amusements, the theater chain that holds most of the Redstone family's interests in the media giants.
That sale was spurred by recent drops in Viacom and CBS shares, which apparently were tied to covenants on loans made to National Amusements. National Amusements has about $800 million in debt that is due in December.
Some analysts were surprised that Redstone had apparently backed some NAI loans with his other media holdings and feared that he would have to sell more stock if the loan situation worsened.
In an interview with the Journal, Redstone said that there was “not a chance,” that he would sell Viacom or CBS to settle any debt issues facing National Amusements. Earlier National Amusements said that it was negotiating with its banks regarding its loans.
“I will not sell Viacom and I will not sell CBS,” Redstone told the Journal. “They're two great companies. We have no intention to sell any more stock and I'm decisive about that.”
He added that he was optimistic that NAI would be able to negotiate favorable terms.
That decisiveness has helped the stock a bit. After the Journal article appeared, Viacom and CBS shares got a boost: Viacom was up 73 cents each to $19.49 on Oct. 23 and CBS rose 33 cents to $8.42 per share. The stocks are still down 54.2% and 68.1% respectively for the year.