Viacom (VIAB) - Get Report, in the wake of a management shakeup that resulted in chief executive Philippe Dauman's departure, is again in talks with Chinese real estate and entertainment conglomerate Dalian Wanda Group to buy a stake in Viacom's struggling Paramount Pictures movie studio, according to two people with knowledge of the talks.
Dauman, who has openly courted buyers for the studio since earlier this year, was authorized by Viacom's board to explore a "possible minority and noncontrolling investment" in the movie unit, according to a Tuesday Securities and Exchange Commission filing by the company.
The former chief executive has until Sept. 13 to present a buyer to the board, at which point he is scheduled to also step down as a Viacom director and nonexecutive chairman.
Viacom and Wanda initially entered negotiations for a studio stake in July, but talks cooled as Dauman battled majority owner Sumner Redstone and his daughter, Sheri, over control of the company, whose assets also include MTV, Nickelodeon and other cable channels. The Redstone family opposed a sale at that time,and could block a successful proposal from Dauman.
The company is also in touch with other potential buyers, according to one of the people with knowledge of the talks.
A Viacom spokesman had no comment.
Wanda, which owns hotels and shopping malls, has diversified into the entertainment business since August 2012, when it spent $2.6 billion to acquire the AMC Entertainment (AMC) - Get Reporttheater chain.
In January, it paid $3.5 billion in cash to buy independent film finance and production company Legendary Entertainment, the producer of The Dark Knight, and Man of Steel, among other big-budget movies. Its Wanda Media Group also invested in Paramount's film Teenage Mutant Ninja Turtles: Out of the Shadows, which performed below expectations this summer.
A Wanda spokesman had no comment, but Wanda chairman Wang Jianlin told Reuters earlier in August that the company intended to secure large U.S. film deals and was interested "not only in Paramount, but all of them. If one of the Big Six would be willing to be sold to us, we would be interested."
Viacom was said to be looking for $4 billion to $5 billion for a 49% stake in the studio, according to reports at the time. The media company is under pressure to raise cash after Paramount lost $136 million in Viacom's most recent quarter and its cash on hand declined to $192 million as of June 30 from $506 million a year ago.
Its most recent film, Ben-Hur, is considered among the year's largest box office duds, with a $100 million budget and $26 million in worldwide ticket sales so far. Its big-budget franchise film Star Trek Beyond also has performed below industry expectations.
"The problem at Paramount is truly shocking," MoffettNathanson analyst and partner Michael Nathanson wrote in a recent report. "Viacom needs to sell the studio now to either a strategic buyer who can take out massive costs or find some 'easy' money, which always seems to be available."
Nathanson estimated that Paramount likely would lose as much as $560 million through 2017.
On Aug. 9, Moody's Investors Service changed its outlook on Viacom to negative from stable and said the company needed to slash its dividend and improve its poor performance to avoid a cut to its credit ratings.
Viacom's stock on Thursday closed at $41.41, up 0.17%.
This article is commentary by an independent contributor. At the time of publication, the author held a position in Viacom.