LOS ANGELES (AP) - Embattled media company Viacom says it's fielding interest from investors who want to take a strategic minority stake in its movie studio, Paramount Pictures, heeding calls from shareholders frustrated at the company's sagging performance.
LOS ANGELES (AP) — Embattled media company Viacom says it's fielding interest from investors who want to take a strategic minority stake in its movie studio, Paramount Pictures, heeding calls from shareholders frustrated at the company's sagging performance.
Shares jumped as much as 7 percent before settling back to only about 1 percent higher at $37.17 Tuesday.
CEO Philippe Dauman told an investor conference in New York that he'll pursue discussions with a select group of potential investors with an aim to conclude the process by the end of June.
The exploration for a strategic investor comes as Viacom shareholders are increasingly frustrated. The stock is down nearly 60 percent since July 2014 and there is uncertainty about who will control the company after founder Sumner Redstone.
Redstone's health and mental capacity are the subject of a trial in Los Angeles, while Dauman and Redstone's daughter Shari are positioning themselves as the best caretakers of a trust that will control nearly 80 percent of the voting stock in both CBS Corp. and Viacom Inc. upon Sumner Redstone's death.
There has been speculation that bidders for a stake in Paramount include Chinese firms like e-commerce giant Alibaba, which invested in Paramount's "Mission Impossible: Rogue Nation," and helped sell advance tickets through its Taobao movie site.
A joint venture with a Chinese firm could also help win Paramount movies cherished co-production status in that country, allowing for a greater share of box office revenues and choice release dates in what will likely be the world's largest theatrical movie market in just a few years.
Last month, Legendary Entertainment, the U.S. studio that backed hit films such as "The Dark Knight" and "Inception," was acquired for $3.5 billion by the Chinese theater chain owner Dalian Wanda, which also owns U.S. chain AMC.
Paramount, the Hollywood studio behind franchises like the rebooted "Star Trek" series, has had a rough time lately. In the most recent quarter, its losses more than doubled to $146 million while revenue sank 15 percent.
Analysts say Paramount is worth about $3.5 billion to $4 billion but remains underappreciated. It has a 104-year history, a film library that includes titles from the "Indiana Jones" and "Godfather" series and a slate of upcoming blockbusters such as "Star Trek Beyond," due out this July, as well as sequels to "Transformers" and "World War Z" expected in 2017.
Mario Gabelli, whose Gabelli Asset Management Inc. owns 10 percent of Viacom's voting shares and who has called for a shake-up at Viacom, tweeted that the move was a "logical first step."
Jefferies analyst John Janedis said in a research note Tuesday an investment would help "set a floor value for the asset — a benefit for the stock."
Follow AP Business Writer Ryan Nakashima at https://twitter.com/rnakashi . His work can be found at http://bigstory.ap.org/content/ryan-nakashima