John Malone: Viacom Is Undervalued

Viacom Inc. is undervalued because of the turmoil over the battle for control of the company, said billionaire John Malone, who’s been piling up media acquisitions.

“They’ve got some great assets and, right at the moment because of the turmoil, they’re substantially undervalued,” Malone, 75, said after arriving in Sun Valley, where Allen & Co. hosts an annual conference of media and technology moguls.

John Malone

According to Bloomberg, Malone is pursuing tie-ups in a challenging entertainment landscape marked by sluggish advertising sales and shrinking audiences. Last week, Lions Gate Entertainment Corp. agreed to buy Malone’s Starz in deal valued at $4.4 billion. The billionaire said he wants to give Starz and Lions Gate “the opportunity to be bigger, more aggressive.”

Malone hold stakes in both companies, as well as Discovery Communications Inc., and analysts say he likely has several other targets in his sights, including AMC Networks Inc., Scripps Networks Interactive Inc. and Viacom, which could end up for sale depending on the outcome of a legal battle pitting Dauman against controlling shareholder Sumner Redstone, 93, and his daughter Shari.

“Sumner has been a long-term friend and sometimes partner and sometimes frenemy, and you hate to see the stress in a family situation,” Malone said. “I certainly hope it all works to everybody’s benefit. They’ve created some great assets over the years and are a very important part of our industry.”