Redstone

"I went off to a Christmas cruise in the Caribbean with about ten pounds of Paramount internal data to study. The bidding process had given each side the ability to top the other with a three-week pause between bids, and I was prepared for Viacom to raise the stakes. Which they did. Over the next months the bids went from $62 a share to $95, and the transaction now approached $9 billion. We both had to raise more equity. Redstone got Blockbuster to inject $500 million into Viacom, and we got Advance, the parent company of Condé Nast, as well as BellSouth, to come in with us. It was a grueling process, and the media followed each bid as if it were the longest horse race in history. At one stage, when Viacom had the leading bid, *New York* magazine put me on the cover with the headline MOGUL IN A MESS."

"In the middle of dinner, I decided to call the office and see if there was any news. I found a pay phone and was told that Redstone’s primary adviser at Bear Stearns had come up with the idea of adding a CVR, a contingent value right, to the pot. The CVR was a new Wall Street invention. It meant that if Viacom stock didn’t rise within a year after purchasing Paramount to a certain price, then the shareholders would get a stock dividend to make up the difference. This was valued at $2 a share higher than our offer. It was a gimmick, but theoretically had dangerous consequences I didn’t want to risk. What we didn’t know was that Ace Greenberg, head of Bear Stearns, had guaranteed to Sumner that he could manipulate the stock during that one-year period so that there would never be a loss—it would never go below a certain level, so there would be no risk. And eventually that is what happened. It wasn’t entirely legal, but I was too Rebecca of Sunnybrook Farm to even know about, much less consider, such a manipulation."