National Amusements, the controlling shareholder of both CBS Corp. and Viacom, has taken the first official steps in getting the band back together.
CBS Corp. on Thursday (Sept. 29) formally acknowledged that its board of directors received a letter from National Amusements — the Sumner Redstone-led entity of which daughter Shari Redstone owns the 20% of company shares not owned by her father.
The letter requests that CBS Corp. consider a potential combination with Viacom.
National Amusements, directly and through subsidiaries, owns approximately 80% of the voting shares of both CBS and Viacom.
In response, CBS said the company “will take appropriate action to evaluate what is in the best interest of CBS Corp. and its shareholders.”
That’s led to a plethora of speculation and investor excitement over the reunification of two entities split apart with great fanfare in 2005.
According to Reuters, the letter stated that a merger “would allow the combined company to respond even more aggressively and effectively to the challenges of the changing entertainment and media landscape.”
But, CBS Corp. President/CEO Les Moonves has been cool to a recombination of his company with struggling Viacom, which has been battered on financial markets in the last year as a result of an ongoing saga tied to the company’s control; 93-year-old Sumner Redstone’s health is deteriorating, and a family feud of sorts ensued. Meanwhile, Viacom’s Paramount Pictures has been more productive than a Virginia turkey farm, with a horrific track record that has led to steep losses and poor 2017 visibility.
Investors seem warm to the idea of a CBS/Viacom merger. Shares of CBS Corp. stock finished Sept. 29 up 42 cents, to $54.57. Meanwhile, Viacom shares jumped $1.60, to $42.52, on the news.