Transaction ill-timed due to Viacom's split, sez Redstone
Viacom chief Sumner Redstone has put the kibosh on what was widely viewed as a longshot play for DreamWorks by Paramount.A play that never even reached the offer stage. Though Viacom and Par had no comment Thursday, Redstone made it clear at a corporate retreat this week that a DreamWorks transaction was ill-timed due to Viacom’s split into two companies. Viacom announced Tuesday that the split, which will leave Paramount and the cable nets under the Viacom moniker, would be completed by the end of the year. Redstone’s reluctance to OK proceeding with a bid for DreamWorks — which would probably be in the range of $1.5 billion, including debt assumption — didn’t stem from questions of whether such a deal would make strategic sense for Paramount. Par chief Brad Grey had expressed a desire to explore an acquisition in the wake of last month’s collapse of negotiations for Universal to buy the 11-year-old studio founded by Steven Spielberg, Jeffrey Katzenberg and David Geffen. Paramount’s interest became known a week ago, when there was supposedly talk that Universal was coming back to the bidding table. (Universal sources deny that any second offer has been made.) Insiders believe Gray favored such a transaction because it would give Paramount access to Spielberg and DreamWorks Animation output along with increasing the number of pics in Par’s pipeline. But now such a deal will only be feasible after the split’s completed — and if a marriage with Universal, which many view as inevitable, does not occur.