Sumner Redstone, the 84 year old chairman and controlling shareholder of Viacom and CBS, is negotiating a settlement with his 52 year old daughter Shari under which she would step down as a director of both CBS and Viacom and relinquish her roughly 20% stake in National Amusements, the holding company that owns a controlling stake in both CBS and Viacom.
People familiar with the negotiations said they have been taking place for at least two months. They began after Sumner Redstone made it clear to his daughter that he did not want her to succeed him as chairman of Viacom or CBS .
While Redstone, who has not returned calls, has never explictly stated that Shari would succeed him as chairman, he has made many statements indicating that was a strong likelihood, though also saying it will ultimately be up to the board of directors of both companies.
Why Redtsone had a change of heart is unclear. It is possible that Shari was pressuring him to take the job sooner rather than later, but that is speculation. Shari Redstone has not returned calls.
Feuds are not uncommon in the Redstone family. Last year, Sumner's son Brent sued National Amusements and ultimately settled with his father when the elder Redstone purchased Brent's stake in National Amusements.
With that purchase, Sumner Redstone's stake in National Amusements, which holds the roughly 76% voting stakes in Viacom and CBS, is roughly 80%, while Shari controls the rest. Now, the two are trying to figure out how she can monetize that stake, leaving Sumner as the sole owner of National Amusements.
While a number of possiblities exist, one that has been explored in depth involves a transfer of National Amusements movie theater business--which started Viacom and Shari runs--to Shari for her stake in National Amusements.
Bankers said that business could be worth anywhere from $1 billion to $2 billion--and given that disparity, it's apparent why such a negotiation may not succeed.
While investors are taking Shari Redtsone's expected exit from National Amusements, Viacom and CBS as a sign that one or both may be sold, that is far from clear.
Right now, say people familair with the negotiations, this is purely about Shari Redstone's future. Sumner remains in control of both CBS and Viacom.
Upon his death, whenever that may be, he will have to choose whom to leave National Amusements--and that person may or may not become chairman of CBS and Viacom.
While one can never rule out a sale or go private transaction for either CBS or Viacom, if history is any guide it would appear that they, not his kin, are what Sumner Redstone values above all else.