Redstone Group Seeks to Hike Its Viacom Stake

An investor group proposing to buy out Viacom International came under new pressure to increase its bid for the company Tuesday as a major shareholder group sought federal regulatory clearance to substantially raise its stake in the entertainment, cable and broadcast firm.

A shareholder group led by National Amusements, a Dedham, Mass.-based theater chain, said it had filed for clearance to increase its Viacom stake to as much as 24.9% from the current 9.9%. The group has described its stake as an investment, but it said in papers filed with the Securities and Exchange Commission that it may “consider other alternatives” in light of the investor group’s buyout offer.

The maneuver suggested that National Amusements might be planning to acquire enough stock to sway Viacom’s board to hold out for a higher bid than the $40.50-per-share offer made two weeks ago, some observers suggested. The group could also be planning a bid of its own, they said.

“This raises a threat,” one Wall Street professional said. “They’re positioning themselves to force (the investor group) to raise their bid, or they may start an offer themselves.”

He added, however, that there was a “real question” about whether the National Amusements group could raise the financing to make a counteroffer.

Neither Sumner M. Redstone, chairman of National Amusements, nor other company officials could be reached for comment.

Under the federal Hart-Scott-Rodino Act, the shareholder group must file reports with the Justice Department and the Federal Trade Commission to enable those agencies to review the antitrust implications of a takeover.

An investor group that includes some top managers of Viacom on Sept. 15 made a formal offer of $40.50 a share for Viacom, including $37 cash and $3.50 in preferred stock.

But some outside analysts have suggested that the company may be worth substantially more than that $2.73 billion, and in the past two weeks National Amusements and another major shareholder, Coniston Partners, have sought to pressure the investor group to increase its bid.