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Paramount Pictures

Report: Viacom in talks to sell Paramount stake to Wanda

Roger Yu
USA TODAY
April O'Neil (Megan Fox), with Vern Fenwick (Will Arnett) and Casey Jones (Stephen Amell) is the least appealing character in 'Teenage Mutant Ninja Turtles: Out of the Shadows.'

Viacom, the media company that owns cable networks and movie production businesses, is in talks to sell a 49% stake in its film studio, Paramount Pictures, to China’s Dalian Wanda Group, The Wall Street Journal reported Wednesday.

Earlier this year, Viacom announced its plans to sell a significant minority stake of the struggling movie studio to raise cash that can be used to pay its debt and fund other operations. Wanda, a huge conglomerate in China with subsidiaries in construction, hospitality and entertainment, has been beefing up its movie business in recent months and is widely speculated as a possible buyer of the stake.

Viacom may sell 'significant' minority stake in Paramount Pictures

Viacom declined to comment. Wanda couldn’t immediately be reached for comment.

In selling the stake, Viacom wants a deal that would value Paramount at about $8 billion to $10 billion, the Journal reported, citing unnamed sources.

Seeking bidders for a Paramount stake was one the first major strategic moves made by Viacom CEO Philippe Dauman when he replaced Sumner Redstone as the chairman of the board in February. As he revealed the plans, Dauman hinted that a strategic buyer could be an entity with experience in international markets.

“In this time of change and enormous opportunity in our industry, a partnership will bring significant benefit to Paramount and Viacom, both strategically and financially, provide new opportunities for Paramount's employees and talent," Dauman said in February. "The value of motion picture content continues to increase with the explosion of screens and the rapid expansion of the global theatrical market."

Wanda has been open about collecting more assets in the movie business, and its involvement could lead to more production resources and distribution channels for Paramount.

In 2012, Wanda paid $2.6 billion, including assuming debt, to buy AMC Entertainment Holdings, which operates AMC theaters. AMC Entertainment said Tuesday it has a deal to buy Europe's largest cinema chain, Odeon & UCI Cinemas Group, for about $1.2 billion.

Viacom's intent to sell a large chunk of its movie business comes amid calls from investors to streamline its businesses and pay off some debt. Viacom's second-largest shareholder, Mario Gabelli, said in December Viacom should engage Alibaba, the Chinese e-commerce giant controlled by billionaire Jack Ma, for a deal to sell a Paramount stake.

Paramount is the crown jewel of Viacom, which also owns Nickelodeon, BET, MTV, VH1 and Comedy Central. But with few blockbusters in recent months, compared to competitors, Paramount is looking to focus on its TV network unit and the fast-changing technology needed to deliver TV content to younger viewers who are reluctant to subscribe to cable packages.

Viacom's "filmed entertainment" unit, primarily Paramount, reported a 1% decline in revenue to $655 million in the most recent quarter.

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