NEW YORK (Reuters) - Viacom Inc (VIAB.O) should package 10 percent of its international operations and take it public, Mario Gabelli, chief executive office of GAMCO Investors Inc, said Tuesday at the Reuters Global Investment 2018 Outlook.
Gabelli, whose Rye, New York-based firm is the second largest holder of voting shares of Viacom after Sumner Redstone, said he is pleased the direction the company is going under its new chief executive officer, Bob Bakish.
“It is a work in progress,” Gabelli said. “He is doing great.”
Bakish took over as CEO of Viacom, which owns Comedy Central, Nickelodeon and Paramount Pictures, late last year. He has made improving relations with distributors and focusing on six of the company’s networks as key points of a turnaround to improve advertising and affiliate sales.
To boost capital, reduce debt and increase its flexibility, Viacom should take 10 percent of its non-U.S. operations and float it in Hong Kong, Gabelli said.
“They should do the offering in Hong Kong and get the Transformers out there so that the Chinese love the Transformers and they’ll bid up the stock,” he said, noting that Paramount’s “Transformers” movie franchise is popular in Asia.
A Viacom spokesman declined to comment.
Looking at the broader media landscape, the 75-year-old value investor said he was optimistic that AT&T’s (T.N) $85 billion bid to acquire Time Warner Inc TWX.N would be completed, despite some concerns from the Department of Justice.
“I think there’s an 80 percent probability that it goes through,” he said.
Overall, Gabelli said he anticipates a wave of merger and acquisition activity in all industries as details of the U.S. tax reform plan now being considered in both houses of Congress, become more clear. The tax reform is expected to reduce corporate taxes and push up corporate profits.
“You will have global lovemaking at an accelerated rate,” he said. “Companies are ready to grow. ... They just need to have what the rules of engagement are.”
For other news from Reuters Global Investment 2018 Outlook Summit, see: here
Reporting by Jessica Toonkel; Additional reporting by Trevor Hunnicutt and Jonathan Stempel; Editing by Leslie Adler