CBS Is Planning Offer for Sister Company Viacom -- Update
June 18 2019 - 4:56PM
Dow Jones News
By Benjamin Mullin and Keach Hagey
CBS Corp. is preparing to make an offer for sister media company
Viacom Inc. in the coming weeks, following a meeting of CBS
directors last week in which a potential deal was discussed,
according to people familiar with the situation.
Representatives of CBS and Viacom have already had preliminary
discussions about the outlines of a deal, one of the people
said.
If the companies move ahead with talks, it would be a third
attempt to reunite the media empire that was divided by mogul
Sumner Redstone more than 13 years ago.
A deal is far from certain. Determining the price for a stock
transaction -- which requires setting a value for the companies
relative to each other -- is one major hurdle.
Picking a new leadership team is another challenge. Viacom Chief
Executive Bob Bakish is widely believed by people close to the
process to be in pole position to become CEO of the combined
company. There is debate and discussion already about how the rest
of the management team would fill out, people familiar with the
situation said.
Shari Redstone, vice chairman of both companies, believes that
CBS and Viacom would be better positioned to compete with larger
rivals as one company. She is president of National Amusements
Inc., which controls both CBS and Viacom.
Viacom has been the weaker of the two companies over the past
several years, having suffered as cable-TV cord-cutting pulled down
ratings for its major networks. A merger with CBS would give Viacom
greater scale and more leverage in negotiations with advertisers
and cable-TV providers. CBS, which has been propelled by sports and
some broadcast-TV hits, could stand to benefit from cable networks
owned by Viacom that reach younger audiences, such as Nickelodeon
and MTV.
CBS has had challenges, too. The company has had an acting CEO,
Joseph Ianniello, since former Chief Executive Leslie Moonves was
forced to step down last year in response to allegations of sexual
assault and harassment. Mr. Moonves has denied the allegations.
CBS is also battling flagging ratings at its news division and
recently reshuffled the lineup of anchors at its flagship news
shows under new news president Susan Zirinsky.
Viacom's Paramount film studio could provide programming for
CBS's Showtime premium cable channel and its CBS All Access
subscription streaming-video service. And Viacom's library of film
and TV shows would give the combined company increased clout in a
streaming-video marketplace hungry for spinoffs and reboots of
popular franchises.
This marks the third time in four years that directors at CBS
and Viacom have explored a merger. The first merger attempt, in
late 2016, was called off due to a lack of enthusiasm on the part
of both companies. The second attempt, in 2018, culminated in a
shareholder lawsuit filed by CBS against the Redstones and National
Amusements, accusing them of breaching their fiduciary duties. It
concluded in a settlement that stipulated National Amusements
wouldn't propose a merger for roughly two years.
That doesn't preclude the possibility of a merger, however. The
two companies could merge if two-thirds of the board members at CBS
not affiliated with National Amusements vote for it.
Write to Benjamin Mullin at Benjamin.Mullin@wsj.com and Keach
Hagey at keach.hagey@wsj.com
(END) Dow Jones Newswires
June 18, 2019 16:41 ET (20:41 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
CBS (NYSE:CBS)
Historical Stock Chart
From Aug 2024 to Sep 2024
CBS (NYSE:CBS)
Historical Stock Chart
From Sep 2023 to Sep 2024