By Jessica Toonkel
NEW YORK (Reuters) - Viacom's board appears poised to replace Sumner Redstone as chairman on Thursday, after the aging mogul stepped down from his executive role at the top of CBS, but it was not clear who would get his job at Viacom as Redstone's daughter made clear she did not want CEO Philippe Dauman to succeed her father.
Redstone, 92 and in poor health, unexpectedly resigned as executive chairman of CBS on Wednesday, and Viacom said its directors would meet the next day, without saying what they would discuss. Both companies are controlled by Redstone and investors said that they expected him to stand down.
Daughter Shari Redstone said that both companies needed an "independent voice" who was not involved in her family's personal matters or on her father's trust. That excluded herself and fellow trust member Dauman.
Shares of CBS Corp (N:CBS) were up 4.6 percent in after-hours market trading, while those of Viacom Inc (O:VIAB) rose 10 percent.
CBS said Redstone would be replaced by Leslie Moonves, its president and chief executive since 2006.
"It's for the best. It's too much distraction. It's time to move on," said Sal Muoio, whose investment firm is one of the largest owners of voting shares of Viacom, outside the Redstone family. He said Redstone was widely expected to resign at Viacom.
Redstone's health has been the subject of intense debate, partly due to his notable absence from the companies' recent earnings conference calls. His former girlfriend, Manuela Herzer, challenged his mental competency in a lawsuit in November.
As part of that legal fight, Redstone underwent a mental examination last Friday by a psychiatrist hired by Herzer. The results of that test have not been made public.
Herzer’s attorneys could potentially use the psychiatrist's conclusions to argue that her lawsuit should not be dismissed. A Los Angeles judge is set to make a decision on Feb. 29.
CBS' move effectively cements Moonves' control of the company, according to one investor.
"(Redstone’s) role has been diminished for some time and Les Moonves has been the guy running the company. My initial take would be that net-net there’s no change here," said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco, a hedge fund that does not own CBS or Viacom stock.
Redstone controls about 80 percent of the voting shares in Viacom and CBS through a holding company.
CBS said that, before electing Moonves, its board offered the position of non-executive chair to Redstone's daughter, Shari Redstone, but she declined.
Shari Redstone confirmed she declined the offer and congratulated Moonves on his new role.
"It is my firm belief that whoever may succeed my father as Chair at each company should be someone who is not a Trustee of my father’s trust or otherwise intertwined in Redstone family matters, but rather a leader with an independent voice," she said in an emailed statement. "I was honored to nominate Les as the CBS Chair and am delighted to congratulate him on his new position."
Viacom said last month that it cut Redstone's total pay by 85 percent last year in light of his "reduced responsibilities," without giving further details.
Redstone's resignation as executive chairman was effective Feb. 2, CBS said. He will remain as chairman emeritus.