Analyst: Redstone Should Take Viacom Private

Pali Research’s Rich Greenfield follows his recent harsh assessment of Viacom and his suggestion that CEO Tom Freston’s replacement might be necessary with a client note urging Sumner Redstone to take the company private. Redstone’s National Amusements owns 12 percent of the outstanding shares. His rationale includes a belief the public markets are significantly undervaluing Viacom’s key underlying asset — content — and the idea that Viacom is too risk averse because of sensitivity to investor concerns. “The more we think about these issues and how Viacom stock continues to under perform the market, the more we think, ‘Why isn’t Viacom a private company?’ Viacom management would then be free to run Viacom how they want, without worrying about public shareholders.” Greenfield contends that Redstone, chairman of Viacom and CBS, can use debt to finance a buyout at a 15 percent premium to the current price; VIAB is trading at $32.81. One more idea from Greenfield — selling Paramount could help finance such a move.
Related: Breaking Up Was The Easy Part For Viacom and CBS; Making It Pay Is Another Story

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