Viacom, CBS enter final stretch of merger talks

CBS and Viacom are nearing a deal for a merged company, with the final stumbling block appearing to be an agreement on exchange ratio. 

According to Variety, board members from the businesses spent the better part of the weekend hammering out final details around the merger.

It is believed that a deal could be reached by Monday or Tuesday, close to a week after it was originally planned to close.

The most significant stumbling point in negotiations is understood to be the stock exchange ratio, which informs the final price for the deal.

In early 2018, the last agreed-upon ratio stood at 0.61 CBS shares for every share of Viacom stock.

As of Friday (9 August), CBS’s market cap was $18.23bn at $48.91 a share, while Viacom’s was $13.81bn at $34.24 per share.

Variety reports that a provisional price-tag for the deal values Viacom at around $13bn – a stock price that already accounts for the ‘merger premium’, according to CBS.

The businesses – which are both owned by US-based National Amusements, which is controlled by the Redstone family – have come close to a deal a number of times in recent years, most recently nearing a merger agreement in early 2018 before leadership disagreements around Viacom boss Bob Bakish and former CBS chief Les Moonves derailed those talks.

However, this time around, with Moonves out of the picture following a sexual harassment and abuse scandal last autumn, an exec structure has already been reportedly agreed for a merged business.

As reported last week, Viacom boss Bob Bakish will be the CEO of a newly combined company, with acting CBS CEO Joe Ianniello set to be offered a job overseeing all CBS-branded assets.

Related