Viacom is in “substantive discussions with a select group” of potential investors to sell a minority stake in movie studio Paramount, CEO and chairman Philippe Dauman said Tuesday.
“We have been approached by several potential strategic investors in Paramount. We believe that pursuing a transaction with a minority investor would be a great benefit,” he said, speaking at the Jefferies Media & Communications Conference in New York City.
The company is targeting an agreement by the end of its fiscal third quarter, in the middle of the year.
It’s the first major initiative by Dauman in the position of chairman. He is also chief executive of the company, which is beleaguered by challenged ratings at its cable networks. The company’s stock has been among the worst performing in its class in the last year, as investors question its future while audiences migrate to online video and households scale back pay-TV subscriptions.
Earlier this month, Viacom named Dauman as chairman at an emergency board meeting when mogul Sumner Redstone stepped down to an emeritus position.
Viacom shares jumped on the news. Class B shares, which were down 3 percent before the news, spiked to trade as much as 7 percent higher at $39.45, before paring back the gains to trade up about 3.6 percent. The stock has tumbled about 46 percent in the last year.
A small activist investor in Viacom, New York hedge fund SpringOwl Asset Management, said bringing in a partner to help make money off of Paramount was “an important step” that the fund had specifically urged the company to pursue. “The positive reaction in share price illustrates the support we have among shareholders,” the fund said in a statement.