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CBS prepares for merger talk

CBS - Credit Bloomberg

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A deal would reunite the owner of the most-watched broadcast TV network last year with Viacom’s film-and-cable empire, which includes the Paramount Pictures studio, MTV and Nickelodeon.

Thursday 10, January 2019

(Bloomberg) --When CBS Corp. board members go to Los Angeles for their 31 January meeting, they’ll have more on the agenda than just a tour of the local TV studios.

The 11-member panel is expected to discuss both the hunt for a permanent chief executive officer and the possibility of a merger with Viacom Inc., according to people familiar with the situation. The directors are likely to ask CBS’s financial advisers to look at strategic options -- including, but not limited to, a possible Viacom deal -- said the people, who asked not to be identified because the deliberations are private. A decision on whether to pursue a tie-up could come within weeks.

Viacom Class B shares rose as much as 1.8 per cent to $29.22 in New York trading Wednesday, while CBS shares fell as much as one per cent to $47.89.

The possibility of a Viacom deal has been the elephant in the room since the departure in September of longtime CEO Les Moonves, who was fired after allegations of sexual harassment and assault. He had opposed the merger -- a move long championed by the Redstone family, which controls both companies -- because of concerns about who would manage the combined business. Since the ouster, Joe Ianniello, formerly Moonves’s deputy, has been running CBS as acting CEO.

At the time of Moonves’s departure, the Redstones agreed to not propose a combination again for at least two years, but there is nothing stopping the independent directors of both companies from seeking a transaction.

The New York Post reported earlier this week that CBS’s board may renew Viacom talks as soon as this month, with the hopes of sealing a deal by March or April.

They had been the same company until a split more than a decade ago.

In more recent years, they’ve been pursuing somewhat different strategies. To adapt to the streaming era, CBS launched its own monthly subscription service, CBS All Access, while Viacom has been signing content production deals with services such as Netflix.

TAGS : CBS, Viacom, Netflix, CBS All Access

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