Redstone may aim to take Midway private

Viacom chief exec Sumner Redstone may well be planning to take publisher Midway private in the near future, it has emerged, with the media magnate taking advice on his options once his stake goes past 80 per cent.

Redstone already holds over 72 per cent of the company's stock, up from less than 30 per cent at the start of the year, and has just requested that the firm reduce its board of directors from eleven to eight members, and add his daughter, Shari Redstone, as a director.

Midway chairman Neil Nicastro is to resign from the company, effective today, having announced his resignation a few days ago - a decision which is also thought to have been taken at the behest of Redstone.

Redstone has also recently been discussing his interest in the game sector in his capacity as Viacom boss, telling a conference in New York earlier this week that the giant media corporation had considered a bid for Electronic Arts - but baulked at the $20 billion price tag associated with such a move.

The firm is, however, considering other options in the games industry - prompting speculation from analysts that if Redstone does take Midway private, it will be as part of the Viacom group, giving it an outlet into the games industry for its franchises such as MTV, Nickolodeon and Paramount (which owns movie and TV licenses including the Star Trek brand). Viacom is also the parent company of the Blockbuster chain of entertainment stores.

While it's plausible that this could be the eventual fate of Midway, it seems an unusual way for such a business transaction to be conducted. Midway is a personal investment for Redstone; Viacom owns no share of the company, and would have to buy it from its own chairman in order to take control. It would also be a serious step down from the firm's ambitions to own a market leading publisher - making it far more likely that the company is still considering far larger potential acquisition targets in the games industry.