Redstone spat lifts Viacom; BHP bow-out blasts Alcoa; Williams Scotsman changes accent

By Evan Weinberger

New York, July 19 - News of an aborted takeover bid for Alcoa Inc. and a question over succession at Viacom, Inc. sent shares in the two companies in opposite directions Thursday.

According to a report in The Australian, BHP Billiton Ltd. was no longer considering making a play for the American aluminum producer. That sent Alcoa's stock tumbling Thursday.

At the same time, what once appeared to be a smooth succession at the media giant Viacom got cloudier Thursday as The Wall Street Journal reported that Shari Redstone, the vice chairman and daughter of Viacom chairman Sumner Redstone, resigned her position on Viacom's board. Shari Redstone denied the report through a spokesman.

In other takeover news, mobile office and storage builder Williams Scotsman, Inc. agreed to be bought by Ristretto, the parent company of Algeco, its chief European competitor, Thursday. The deal is an all-cash transaction totaling $2.2 billion, or $28.25 per share, including Ristretto taking on Williams Scotsman debt. That offer represents a 21% premium to the closing price of Williams Scotsman stock (Nasdaq: WLSC) on Wednesday, which was $23.36.

Williams Scotsman chairman and chief executive officer Gary Holthaus will move in to the top spot at privately-held Ristretto as part of the deal.

"With very limited geographic overlap, the combination of these complementary businesses will allow both Algeco and Williams Scotsman employees to continue delivering best-in-class customer service, while providing them with opportunities for further career development in a global company that has exciting prospects for substantial additional growth," Holthaus said in a statement.

Holthaus said there would be no job reductions in North American operations as a result of the buyout. As part of the deal, Williams Scotsman will have until Aug. 17 to find a better offer for the Baltimore-based company.

Williams Scotsman stock finished trading Thursday up $4.64, or 19.86%, at $28 on news of the deal, which is set to be completed in the fourth quarter this year.

On news that an investor in Gemstar-TV Guide International Inc. backed the idea of a sale of the media company, which brings readers and viewers TV Guide every week, one market source said the stock was getting back to its proper level.

Citadel Investment Group LLC, owner of an 8.4% share in Gemstar said it backed the idea of a sale Thursday. But, the firm cautioned, selling Gemstar to a financial investor would not be in the best interest of shareholders. Citadel said in a letter that Gemstar was undervalued.

Gemstar-TV Guide announced earlier this month that it was seeking strategic alternatives, which often means a sale. Rupert Murdoch's News Corp. owns a controlling interest in Gemstar.

Los Angeles-based Gemstar's stock (Nasdaq: GMST) rose slightly Thursday, finishing up 2 cents, or 0.3%, at $6.75.

Alcoa ditched by dance partner

According to a report in the newspaper The Australian Thursday, Australian mining giant BHP Billiton is no longer considering its rumored purchase of Alcoa. Speculation about a BHP takeover of Alcoa began almost immediately after Alcoa's hostile bid for Alcan, Inc. failed. The Canadian aluminum producer agreed to be bought by Rio Tinto plc earlier this month.

Alcoa's failure to seal the deal made it a prime target for a takeover, according to market gossip. Another mining concern rumored to be looking at the American aluminum miner is Brazil's Companhia Vale do Rio Doce.

Neither Pittsburgh-based Alcoa nor BHP commented on reports of the aborted takeover bid.

Alcoa stock (NYSE: AA) plummeted during the day while rumors swirled, but eventually recouped much of its losses.

The stock ended down $1.83, or 3.94%, at $44.62. It had been down as low as $43.05 during the course of trading Thursday.

Viacom succession battle brewing?

Rumors that Shari Redstone, the daughter of Viacom chairman Sumner Redstone and vice chairman of the company, quit Viacom's board over a spat with her father sent shares in the media giant up on speculation that the company could be up for sale when its 84-year-od chief is no longer in charge, one market source said.

"That caused a spike," the source said.

A spokesperson for Shari Redstone, who also sits on the board of CBS Corp., denied the Wall Street Journal report that negotiations were ongoing for Ms. Redstone's departure.

"Shari is still an active and involved member of both the CBS and Viacom boards," Nancy Sterling, Shari Redstone's spokeswoman, told Reuters Thursday. "She has no intention of resigning and has not been asked to resign."

The alleged conflict with her father comes from Shari Redstone's call for executive pay to be linked to performance, not just existence, a Fortune magazine report on CNN's web site said.

The Wall Street Journal report said that one outcome of Shari's Redstone rumored resignation would be her buying out the family-owned National Amusement movie theater chain and detaching it from Viacom. National Amusements controls around 80% of New York-based Viacom's voting shares.

Shari Redstone took her current position after Sumner forced out former Viacom CEO Mel Karmazin in 2005.

And family conflict is nothing new for the Redstones. Sumner Redstone settled a lawsuit with his son Brent in February. Brent Redstone claimed that he had been cut out of the decision-making process for National Amusements.

Viacom stock (NYSE: VIA-B) finished $1.18, or 2.86%, higher Thursday, closing at $42.41 on hopes that the company might someday be a takeover target. New York-based CBS Corp. stock (NYSE: CBS-A) also finished higher, gaining 10 cents, or 0.29%, to close at $34.90.

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