Stock closed at $6.43, up 6%
Were a global financial meltdown not in process, a casual observer might call Thursday a pretty good day for CBS.
The Eye affirmed its longtime practice of offering a dividend to stockholders. And its battered shares got a boost Thursday afternoon when controlling shareholder Sumner Redstone, who is grappling with his own debt woes at his National Amusements holding company, issued a statement repeating his insistence that he has plenty of assets and doesn’t intend to sell his shares in CBS or Viacom.
CBS stock closed at $6.43, up 6%, and Viacom also went up 6% to end the broad-rally session at $17.60.
The CBS board OK’d the dividend, once under threat due to the fast-darkening skies of the economy, at 27¢ a share, payable Jan. 1 to shareholders of record as of Dec. 4.
National Amusements, the parent company of CBS and Viacom, is especially dependent on cash from CBS dividends. As it looks to satisfy looming loan obligations, National Amusements has been reviewing its portfolio with lenders, a process that spilled into public view in recent weeks, sending Viacom and CBS stock into tailspins at the same time financial markets were coming unhinged.
Redstone’s statement was prompted by increasing speculation on Wall Street about his options in dealing with a debt load of roughly $1.6 billion. Though he has vowed not to sell company shares, the other potential options are not supremely attractive: selling off movie theaters or stakes in beleaguered vidgame company Midway or slot machine maker WMS Industries.
“I am pleased that talks with National Amusements’ banks and noteholders are proceeding in a smooth and constructive manner,” Redstone said. “It is important to understand that the value of NAI’s assets well exceeds its debt, and NAI has no intention of selling any stock of either Viacom or CBS.”