Transcripts For CNBC Squawk On The Street 20160523 : compare

Transcripts For CNBC Squawk On The Street 20160523

Daughter sherri and the ceo and leader of viacom Phillippe Dauman. This morning he has filed a lawsuit just moments ago along with George Abrams in the massachusetts probate and family Court Challenging changes purportedly made to the trust arrangements by an attorney claiming to represent mr. Redstone. In a legal complaint, these two gentlemen, mr. Dauman and mr. Abrams who again have been removed from the trust that oversees the stake in National Amusements that in turn controls viacom and cbs, they are going to the court saying they want immediate judicial relief and a court ruling to invalidate the purported removal of them by mr. Redstone as trustees of the trust and also invalidate the removal as well as directors of National Amusements. They would assume then want him, that is mr. Redstone, to be deemed potentially incompetent and not able to make decisions. And very harshly worded language, guys, that accompanies this lawsuit. In a press release i just received Phillippe Dauman says of Shari Redstone after years of shes inserted herself into her fathers home. Go onto say in fact shes recently repeatedly arranged viacom Board Members to meet with her, weve heard some of this language in the last 48 hours as well. Mr. Abrams, for his part says my soul purpose in joining this lawsuit is to allow the court to determine whether Sumner Redstone, who turns 93 by the way i think this week, in his current diminished capacity has been subject to undue influence in his recent actions in changing his trustees and in changing other documents. They both believe that Shari Redstone is attempting to legally hijack her fathers wellestablished estate plan by removing professional managers and reportedly installing herself and an employee and a friend as in control of the trust. So, you know, the stuff about his health care and the lawsuit with herzer, that was a sideshow, this is the main bout now for control of viacom and cbs between Shari Redstone, and frankly at this point the trustees who were appointed by Sumner Redstone previously to oversee both National Amusements directors and most importantly the trust that will kick in upon his death or when he is deemed incompetent. Why would she keep the current management around if she gets this . Why wont she fire them immediately . Well, there are certain governance issues that dont allow you to fire them immediately, but she would be conceivably able to file and given theyre shareholders. Wow. This is a fight for life for dauman and viacom, many people believe somehow, jim, this will mean theres a potential sale or Something Else in the offing, may be disappointed. The sense i get at least this is Shari Redstones opportunity to assert her control by putting on people on the trust who will follow what she wants. Now, she will claim of course and has claimed by the way many times that she is simply following the direction of her father. Who is simply saying i am no longer in the belief that dauman is no longer to be the right man on the trust or mr. Abrams who had been his attorney for the last 50 years, one of the attorneys. What are the directors saying to you . I spoke to director yesterday on the phone he was on the record. He says, listen, this is New Territory for us. We cant control what happens in the trust, but as the lead director of the board, by the way hes only been lead director for about a month because previously was mr. Redstone and then mr. Dauman skprks mr. Solerno on the board for over 20 years stepped up as the lead director. And he claims, jim and carl, that they had a meeting on tuesday and wednesday of the board where they went over for a day and a half all of the different plans the company had and the way the board was going about measuring managements ability to meet certain targets and that they didnt hear from mr. Redstone at all. That he was silent the entire time. And i said, well, listen, Sumner Redstone has had trouble communicating for some time. Is that any different . And mr. Solerno seemed to indicate he would respond at least in the past to a certain extent and there was a belief on the part of the board that he was more involved. This is going to be very interesting because less than six months ago Phillippe Dauman was on the record testifying to mr. Redstones competency, so the question will become has he declined a great deal since then or not . Shari redstone as she has said in a number of statements indicates that her father is fully on top of things as he has been in the past and these are simply his wishes that shes carrying out to remove mr. Dauman and mr. Abrams from the trust. Thats the most important part of this by the way. Seven people on this trust, previously shari had three people herself but four not necessarily in her corner, without them she will conceivably have control or at least the appearance of control and therefore be able to do what it is she thinks is the best interest of viacom and cbs or in her best interest. Phillippe dauman well paid. Very much so. Especially given the performance of the stock. Are they really aligned . Thats the key problem i think for the defense they have a stock down dramatically in the last year and a half and performance as like you like to say suboptimal. Yeah, suboptimal sdpl this is the main battle. It has been joined now as the fight really is under way for the future of these two companies, guys. And this lawsuit not unexpected. The conversations i had this weekend would have indicated it was coming. It now has. They are going to try to get reinstated. Interestingly though if they are claiming that mr. Redstone is incompetent, then the trust would kick in. So conceivably you would have them reinstated as trustees and then the trust would be in control of viacom and cbs. Alternatively he will be deemed competent and they will be gone and conceivably mr. Daumans future very much in doubt. Cloudy. Wow. What a story. Big egos, huh . Trying to find parallels in or out of media that have this level of drama. As we said earlier the market focusing on fed speak this week, possibility of a june rate hike on the table. Williams now says two to three hikes seem likely this year adding that timing depends on the strength of the data. And then theres st. Louiss bullard saying a tight labor market and waning global weakness, weak gdp numbers and muted Inflation Expectations support the case against a rate hike. Netnet, and were going to get a lot more leading up to yellen on friday, they continue to lean hawkish, jim, almost all of them. I wonder whether because the market is not down that much if whats going on here is theyre softening for june by saying, listen, two to three, two to three. That really does make june feel more foregone. Weve been hit the stocks that need a weaker dollar have been acting terribly since may 10. And thats been the softening. But the fact is that the s p was good last week. So its making people feel emboldened, that were ready to handle what comes. Because the s p broke that threeweek losing streak. I think it got oversold, but i think also we want to hear yellen on friday. At harvard. At harvard. Radcliff day. They kept radcliff, isnt that something . Nice. By the way les moonves key speaker hes probably been on the phone with his bankers too. Everybody holding on. Friday is going to be a big day because historically thats not been a big day, im working. Im coming. Because shes coming in. Was that ever in question . No. Germanys buyer making unsolicited offer to buy monsanto for 62 billion in cash, more than a 20 premium over fridays close. Earlier on squawk box buyers new ceo spoke about his companys decision to make the bid public. Our decision to make this public follows the announcement of monsanto last week that monsanto received a private offer from us. It was out in the open. And of course we want to respond and explain to the public and to shareholders what the content of the offer is and why it is so attractive to monsanto shareholders. They also want to explain to their own shareholders why it is attractive, of course one of the key things weve pointed out a number of times last week is that bayers stock price has declined dramatically. There was a lot of concern the company was going to issue stock. There was concern whether the offer included stock to monsanto shareholders. Now we know it doesnt. Its all cash, but they will do a Rights Offering, something we dont often see here but common in europe for as much as 15 billion worth of stock. The deal itself though seen as creedive and then get back to, well, whats the real price here, whats the right price . Speaking of people close to bayer, who are structuring the deal, theyre talking this thing is as much as 16 times last months ebitda from monsanto and then you have the likes of Deutsche Bank this morning, german bank, say this is a lowball offer. Of course different multiples because of different years for monsanto versus the 15. 8 times 16 ebitda that is being paid for stra general ta. We dont have regulatory impediments of any significance here. There might be some minor overlaps, we can deal with them. Weve now made this public, were going to reassure our own Shareholder Base as to what were thinking, were going to lever up to four times but quickly reduce that given the cash flow of the combined companies, were going to stay investment grade. Yes, were doing a Rights Offering but this deal will be acreedive and thats where things stand. Well hear from monsanto. The expect is they will reject, but will it be a constructive rejection or one thats more scorched earth is the key question. When will the formers contact senators and Congress People and say this is going to go up big and were not going to allow this. Because this is a Justice Department that listens to everybody other than apparently anthem and cigna can attest to today on some of these reports. These guys are way too confident. They dont know this Justice Department. They dont know it. They know theres not overlaps and that monsanto was willing to pursue a deal with singenta that had more antitrust questions than this deal does. These things have changed. These guys should call me. I didnt get to solve twitter this weekend, but im much closer to where the Justice Department is. When did you have time to do that . In conjunction with the street. Analyzed every deal. And its really incredible the change. Incredible the change. And they should go look at the study we did. Because the study is out of control in terms of what this Justice Department is doing. And then theyre making their winging it. It will be very important when we hear from monsanto in terms of do they bring up antitrust as a concern and, again, everybody expects theyre going to reject. You always reject the first offer, or they simply talk about the fact they think theyre more highly valued than being given credit for. Dont forget the window to nominate directors for a nonstaggered board at monsanto opens october 1st. Yes, were not even at the beginning of the summer, but this is a new ceo right out of the box doing something incredibly bold by german. You do not want to make this a misstep. Youre going to win this if youre this guy, i got to tell you. Biggest takeover ever by a german company. Guys been on the job for three weeks. Whos his counsel . Whos his antitrust counsel . I think they ought to do some homework. Wow. I bet youre hearing directly from them. I hope i do. Instead of them coming to me the way they do, what is cramer talking about, can you get me to cramer . Here he is. I got time. When we come back, tim cooks apples tim cook met with indias Prime Minister and gave a revealing interview over the weekend. Well talk about what he has to say about possibly lowering prices, also some of this news regarding taiwan suppliers on the iphone 7. Also ahead the race for president heating up, goldman says that could be a good thing for some stocks. Look at the premarket s p down 0. 6 for the month. We have not had a down may since 2012. More squawk on the street from the nyse in a minute. charge music you wouldnt hire an organist without hearing them first. Charge so why would you invest without checking brokercheck . Check your broker with brokercheck. Theres no one no one surface. E. No one speed. No one way of driving on each and every road. But there is one car that can conquer them all. The mercedesbenz cclass. Five driving modes let you customize the steering, shift points, and suspension to fit the mood youre in. And the road youre on. The 2016 cclass. Lease the c300 for 359 a month at your local mercedesbenz dealer. Tim cook met with Prime Minister modi as the apple ceo looks to boost business and market share in that country. Cook made an eye opening admission about the cost of iphones in the country. Take a listen. I recognize the prices are high. What we want to do things that lower that over time to the degree that we can, so were looking at a number of different things. What we wouldnt do is lower our quality bar. We know how important that market is to them. Two things, its 125 degrees in india, record breaking heat. And the second is this report that some of these taiwanese suppliers are looking at targets well above the street. Its Economic Daily news. This newspaper has historically had a great relationship with fox com could be thats why you see broadcom stock moving, you see skyworks, cirrus logic, this is all the idea that everyone has been gearing up talk about something that no ones looking for, the idea that iphone 7 could be good because its been doa. All analysts been saying doa. In weeks to Economic Daily news i checked how authoritative Economic Daily news and fox con have been, 100 . They say things are good or if theres a lot of parts being order ordered, theyre right. A lot of people knew apple sale. Would be the highest production for an iphone in two years, at least two years. Its what Lowell Mcadams said would happen. All got lost in the apple is dead moment. Remember when apple was going to file chapter 11 with the most cash ever . Because analysts its sarcasm. Just make sure people know that. It would be ill advised for them to file chapter 11 with 50 some of our people on twitter dont understand sarcasm. No, they dont. I had to tell so many people i liked you this weekend. No, i really like him. Its true. Although they thought that was sarcasm. You cant win. No. Winning is not the point. Its not the point. Ceos will weigh in and say thank you because they did think there was a split between you and me. Okay. When we come back well get cramers mad dash as we count down to the opening bell on this monday. Take one more look at the premarket. More squawk on the street from the nyse is straight ahead. t s. What are we gonna do . How about we pump more into promotions . Nah. What else . What if we hire more sales reps . Nah. What else . What if we digitize the whole supply chain . So people can customize their bike before they buy it. That worked better than expected. Ill dial it back. Yeah, dial it back. Just a little. Live business, powered by sap. When you run live, you run simple. In a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. All right. Lets get to mad dash for a monday, seven minutes before the opening bell. Beginning the week, well start with the as. Different, david, two different firms, big cap firms, merrill lynch, and piper come out saying amazon is underappreciated. These two reports basically are what youve always told me, Amazon Web Services could be gigantic, maybe worth a lot. Bob peck said worth more than 100 billion. But when two guys come out at the same time youre going to get push to amazon. I just think these pieces are very reflective of all the excitement thats going on with that stock 27 retail. Right. Right. Although were they really seeing something we havent already heard about or focused on . None whatsoever. This is no longer a secret nothing i havent learned from you. Its true. Erg youf been saying is encapsulated. You like to point out when research is behind a stock two guys, when bam and piper, when they both jam it, its going to go much higher than this. Okay. We have another a. Alcoa, bank of America Merrill lynch upgrades it. The spin is coming and theyre saying that the new part, the more highly added proprietary 75 aerospace and that makes me think about the big vietnam jet order, which was big. Travel continues and i know the Airline Stocks have been doing poorly. But actual airline orders, aerospace orders are good and people are going to play call. You obviously know alcoa very well. You focused on this spin, but it hasnt really done a lot to add value. Not at all because the actual raw aluminum has been hurt so badly by the chinese dumping. Its kind of like everything other thing that the chinese do. Its stateowned producing way too much aluminum. Now, it shouldnt once this splits up, youre going to see the value. And the value of the proprietary is well in excess of the whole company right now. But when youre connected with anything chinese shs look at the way the tin, the iron ore stocks have come back ever since chinese quit playing games. I dont know what goes on over there, but the stateowned companies dont seem to listen to anybody including the government. The soes, state owned enterprises. So is bandit. Yes. All right. We have so many other things to keep an eye on this morning with the opening bell less than five minutes away. Stay right here on squaw

© 2025 Vimarsana