Viacom, CBS Move to Explore Merger -- WSJ
October 01 2016 - 3:02AM
Dow Jones News
By Keach Hagey, Joann S. Lublin and Joe Flint
The boards of Viacom Inc. and CBS Corp. are moving quickly to
explore the merger recommended by their controlling
shareholder.
A day after Sumner Redstone's National Amusements publicly urged
the media companies to look into a possible merger, Viacom's board
of directors formed a special committee consisting largely of
newcomers handpicked by Mr. Redstone's daughter, Shari.
Ms. Redstone emerged victorious from a brutal power struggle
over the summer that resulted in the ousting of her rival, former
Viacom Chief Executive Philippe Dauman, and a remaking of the
Viacom board. Her father, who is 93 years old and not well, has
been embroiled in a series of lawsuits over the past year
questioning his mental capacity.
Mr. Redstone was in the emergency room on Wednesday with a
respiratory infection, his first visit to the hospital in months,
and was home recovering on Friday, according to people familiar
with matter.
The board of CBS, which hasn't been involved in the legal
battles, also named a special committee to review a potential
recombination, a spokesperson said Friday.
Viacom said Friday that its committee will consist of the five
new independent board members, Chairman Thomas May and Nicole
Seligman, who will co-chair the committee, as well as Kenneth
Lerer, Judith McHale and Ronald Nelson. The special committee will
also include one longtime Viacom director, Charles Phillips.
The special committee is hiring law firm Debevoise &
Plimpton to advise it and intends to hire a financial adviser,
Viacom said.
The Wall Street Journal had earlier reported the expected makeup
of the committee and hiring of the law firm.
National Amusements, which has an almost 80% controlling stake
in both Viacom and CBS, sent a letter on Thursday urging an
all-stock reunion of the two companies, a decade after splitting
them apart. The holding company said the combined company -- which
would join CBS's broadcast network and Showtime with Viacom's
Paramount Pictures studio and MTV and Nickelodeon cable networks --
could better respond to the challenges facing the media
industry.
The focus on a potential merger has put the search for a new
chief executive at Viacom on the back burner, according to people
familiar with the matter, since a merged entity would likely be led
by CBS CEO Les Moonves, a darling of Wall Street. Viacom said last
week that its interim CEO, Tom Dooley, would depart in
mid-November.
While Mr. Moonves has thrown cold water on the notion of a
merger recently in public, saying he likes the current hand he has
at CBS, he has been discussing it with Ms. Redstone for some time,
according to people familiar with the matter.
Last week, Ms. Redstone, Mr. Moonves and Mr. May met in New
York, according to people familiar with the matter.
The companies' special committees will be tasked with
determining whether a merger makes strategic sense and on what deal
terms.
Write to Keach Hagey at keach.hagey@wsj.com, Joann S. Lublin at
joann.lublin@wsj.com and Joe Flint at joe.flint@wsj.com
(END) Dow Jones Newswires
October 01, 2016 02:47 ET (06:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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