Page 103 - מיזוגים ורכישות - פרופ' אהוד קמר תשפב

successful hostile takeover of Viacom (Video and Audio Communications), a treasure
trove of radio and television assets that included MTV, Nickelodeon, Showtime, and The
Movie Channel. He was officially a media mogul.

In 1990, as part of Davis’s many efforts to find a deal partner after losing Time,
Davis and Redstone started to talk about a possible deal between their companies. The
negotiations went on and off for three years with Herbert A. Allen, an investment banker
specializing in the media sector, as a go-between. The parties could not reach an
agreement, however, because both Redstone and Davis wished to control the combined
company. "Finally it became clear," Redstone would later recall, "that Martin [Davis]
simply could not bear to let go of the reins of Paramount. He had built and shaped and
focused this company, he was having a wonderful time running it, and he was not
emotionally prepared to part with it.”

In April 1993, with more than a billion dollars in retained earnings, a series of
disappointing movie releases, and a languishing stock price, rumors began spreading that
Diller and Malone were weighing a bid for Paramount. Robert F. Greenhill, then the
president of the investment bank Morgan Stanley, saw potential. He called Redstone and
suggested they have dinner with Davis. Redstone doubted anything would come out of
the meeting, but did not mind trying. The dinner, in a private dining room at Morgan
Stanley, went surprisingly well. This time, Davis agreed to let Redstone control the votes
provided Davis remained the chief executive officer.

The following five months were spent by the two companies trying to resolve the
remaining issues. The question of control having been resolved, the parties haggled over
price, the stock option Paramount would grant Viacom to protect the deal, and the
protection of Paramount’s shareholders from a decline in the value of the Viacom stock
they would receive. Twice the negotiations broke down but, helped by a rise in Viacom’s
stock price and by Diller’s evasive answer when asked by Davis at an August lunch about
his intentions, they eventually succeeded.

A key strategist for Paramount was Donald Oresman, the company’s 67-year-old
general counsel. Back in 1974, when Paramount was called Gulf and Western Industries
and Oresman was at Simpson Thacher & Bartlett, Oresman discovered that the lead
partner representing Gulf and Western, Joel Dolkart, had stolen money from Simpson
Thacher and from his previous firm. Dolkart was expelled and Simpson Thacher offered
its resignation. Gulf and Western’s chief executive officer Bluhdorn had a better idea: He
made Oresman his main outside lawyer and, two years later, a director. When Bluhdorn
died of a heart attack in 1983, Oresman convinced his fellow directors to choose Davis as
his successor. Several months later Oresman joined Paramount.

99