Redstone's National Amusements Urges Viacom, CBS to Explore Merger--2nd Update
September 29 2016 - 9:23AM
Dow Jones News
By Joshua Jamerson
Sumner Redstone's National Amusements Inc. on Thursday publicly
called for the boards of the companies it controls -- Viacom Inc.
and CBS Corp. -- to explore a reunion of the media giants, arguing
that a combined company could better tackle shifting consumer
trends
In a letter to the companies disclosed in a press release,
National Amusements said it believes a merger could "allow the
combined company to respond even more aggressively and effectively
to the challenges of the changing entertainment and media
landscape."
National Amusements said the optimal deal would be an all-stock
transaction. Neither Sumner nor Shari Redstone would vote as
directors on the matter or participate in any of the related
deliberations. David R. Andelman, a director on the CBS board, also
won't participate.
But National Amusements said it won't support an acquisition of
either Viacom or CBS by a third party. It also won't support a
transaction in which National Amusements would have to surrender
its controlling position in either company, or a deal in which it
doesn't control the combined company.
The move confirms reports that Mr. Redstone's daughter, Shari,
is moving to potentially undo the last big strategic move of her
ailing father.
Coming a decade after Mr. Redstone split the two companies from
each other, the proposed reunion would be effectively an admission
that the split -- intended to free Viacom's then fast-growing cable
channels from the drag of CBS's old-school broadcast assets --
didn't pan out as intended.
Ms. Redstone's call on a potential CBS-Viacom marriage comes
weeks after she cemented a powerful role in her family's $40
billion media empire. Mr. Redstone, who is 93 years old and in ill
health, remains on the board of National Amusements, though he
stepped down from his role as chairman of both CBS and Viacom
earlier this year amid questions about his mental capacity.
Shares of Viacom rose 0.4% to $36.70 in premarket trading, while
CBS shares rose 0.2% to $54.25.
A merger would bring under one roof CBS, a prime-time ratings
juggernaut, and Viacom's struggling networks, such as MTV and
Comedy Central, which typically pursue younger audiences that have
been drawn to streaming services such as Netflix. Viacom also has
been struggling with its Paramount Pictures studio.
Ms. Redstone, president of National Amusements, rose to power in
her father's empire after a bruising power struggle that played out
this summer. She recently ousted her longtime rival, former Viacom
Chief Executive Philippe Dauman, from the boards of both the family
holding company and Viacom. Tom Dooley, Viacom's interim CEO, is
planning to leave in November.
A merger could provide a strong leader for Viacom in the form of
CBS CEO Leslie Moonves, a favorite of media investors. However, Mr.
Moonves has previously expressed skepticism about a merger of the
companies.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
September 29, 2016 09:08 ET (13:08 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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