Sumner Redstone is unloading some of his stock in
Well, kind of.
In an effort to transfer responsibility for a $425 million personal debt to a holding company he indirectly controls, the
(VIA - Get Report)
chairman and CEO is shifting some of his personal stake in the video-game software publisher, according to a regulatory document filed on Thursday.
Prior to the deal, Redstone owned about 64% of Midway directly, and with his indirect holdings, about 89.25% of the company overall.
But the transaction may be about more than shifting debt and stock among related entities. Indeed, the deal anticipates a potential sale of Midway shares by Redstone or the holding company by laying out ground rules for such sales.
Any such sale would be a change in course for Redstone, who has been
gradually building his stake
in Midway over the last two years. Analysts have long questioned his investment, given Midway's
long history of losses
poor game sales
. Still, thanks to recurring purchases by Redstone and
, a privately held company of which Redstone owns 67%, Midway's stock is up more than 400% over the last two years.
A representative for National Amusements, which is participating in the deal, declined to comment.
The transaction, which Redstone entered into on Wednesday, involves a holding company called, of all things, Sumco, 99% of which is owned by National Amusements with the other 1% owned by Redstone. In establishing Sumco, Redstone transferred 32.7 million shares of Midway, worth about $668.9 million, to the holding company. National Amusements transferred another 75,392 Midway shares, about $1.5 million worth, to Sumco.
As a result of the transaction, Redstone's direct stake in Midway will drop from about 57.6 million shares, or about 64% of the company's outstanding shares, to 24.9 million shares, or a 27.7% stake. Thanks to his indirect stake in Sumco, Redstone's total direct and indirect holdings in Midway will remain the same.