Redstone Likes to Play (Video) Games

I dunno, but something strikes me as odd when I see that one person owns 74% of the shares of a company -- especially since that stake has been slowly accumulating over time. I'm referring to the fact that Viacom (NYSE: VIA  ) Chairman Sumner Redstone owns most of strugglingMidway Games (NYSE: MWY  ) . I wouldn't call it a hostile takeover so much as a stalking takeover, with Redstone creeping through the markets like a thief in the night, buying what shares he can find and stuffing them in his jacket. This has been going on for almost four years.

On top of that, Redstone's holding company, National Amusements, holds more than 7% of Midway stock and is also a controlling shareholder of Viacom!

There is no doubting that Mr. Redstone, a former code breaker, is one heck of a businessman, and this latest move should not dissuade anybody from that perception. Some people have speculated that he would either take the company private, or have his very own Viacom buy Midway out from under him. That sounds like it could be a sweet deal for his bank account. A committee of independent directors has been set up to make certain there is no appearance of impropriety, but these kinds of arrangements are not uncommon in business. Ashford Hospitality Trust (NYSE: AHT  ) , a hotel and financing REIT, has a CEO who also owns a privately held company that manages Ashford's properties in exchange for fees. There's nothing wrong with this approach. It's just crafty business, and one that can benefit shareholders because it gives both companies incentives to keep each other healthy.

Midway Games would also be an outstanding purchase for Viacom. The entertainment behemoth would stand to profit handsomely by adding a games division to promote and integrate its plethora of movie, TV, and music properties.

It behooves investors to keep track of insider purchases and note increasing holdings by one person or entity. Sometimes it may foreshadow a coming buyout, which, for those investors not angry at having their investment snatched out from under them, is generally a sweet deal.

Fool contributor Lawrence Meyers owns no stocks mentioned in this article, and hasn't played video games since he was a kid.