Wed, Nov. 16, 3:33 AM
- Possible sticking points have emerged ahead of negotiations between CBS and Viacom (VIA, VIAB) about a potential merger, including who will be on the board of the combined company and what it would be called, sources told Reuters.
- Many investors and observers believe a deal could be announced by the end of the year and that CBS Chief Executive Leslie Moonves will run the merged entity.
Thu, Nov. 10, 7:23 PM
- Speaking to the DealBook Conference, Shari Redstone -- currently part of the ownership urging CBS (CBS -0.5%) and Viacom (VIA +0.4%, VIAB +0.1%) to look into a merger -- says she never supported the two companies' splitting up in the first place.
- A decade ago, Sumner Redstone (who controls CBS and Viacom through family holding company National Amusements) decided to divide the two into separate companies, and while CBS has thrived, Viacom has wrestled with falling ratings and declining ad sales.
- "I was never a great proponent of the split of the two companies," Shari said, adding that Viacom's fate could have turned out better with different leadership (i.e., not now-ousted chief Philippe Dauman).
- While she and Sumner are supporting a merger, the companies "can stand on their own and be great," she said.
Mon, Nov. 7, 2:09 PM
- Time to bring in the help: CBS (CBS +0.9%) has hired Moelis and Goldman Sachs (GS +2.8%) to advise it on a potential re-merger with Viacom (VIA +2%, VIAB +1.9%), The Wall Street Journal reports.
- The companies, which originally merged in 2000 and split again at the beginning of 2006, had created special committees to look at the idea of getting back together as National Amusements -- the holding company for Sumner Redstone that owns voting control of both -- urged the two to examine a deal.
- Wachtell, Lipton, Rosen & Katz, which has been longtime outside counsel for CBS, is also advising on a potential deal.
- Previously: Report: Viacom-CBS could have merger deal by Thanksgiving (Oct. 20 2016)
- Previously: Bloomberg: CBS nears hiring of Goldman, JPMorgan on possible Viacom deal (Oct. 14 2016)
Sun, Oct. 23, 10:24 AM
- Discovery Communications (NASDAQ:DISCA), Scripps Networks (NYSE:SNI), AMC Networks (NASDAQ:AMCX), Lions Gate (NYSE:LGF), Viacom (VIA, VIAB), and CBS already had their tails in the air on Friday afternoon as merger talk between AT&T and Time Warner heated up.
- Previously: AT&T seals $85.4B deal for Time Warner (Oct. 23)
Fri, Oct. 21, 5:23 PM
- AT&T's (T -3%) interest in Time Warner (TWX +7.8%) progressed quickly from "had talks" to "advanced talks" and now a deal could be set by Monday -- which Bloomberg says is due to a sped-up timetable caused by Bloomberg's initial report.
- That's because AT&T is said to be concerned that the publicity could allow other interested suitors like Apple (AAPL -0.4%) or Alphabet (GOOG +0.3%, GOOGL +0.3%) to jump in -- and indeed Apple is said to be monitoring the deal talks, after it made its own approach to Time Warner a few months ago, The Wall Street Journal reports.
- Those talks involved execs under Apple chief Tim Cook and didn't get beyond a preliminary stage. A source tells the WSJ that Google doesn't look interested in an offer for Time Warner.
- But the story of the deal points out just how much behind-the-scenes strategic talk is going on in the media/telecom spaces, as companies vie to be among the new leaders in an upended, converged digital media climate.
- Sumner Redstone was said to be considering not only the merger of CBS (CBS +2.1%) and Viacom (VIA +2.7%, VIAB +2.8%) that he's already pushing for, but also to combine that entity with Time Warner.
- Meanwhile, Comcast (CMCSA -0.5%) could join another company to get involved, the WSJ says, though that makes more sense if Time Warner's open to being parted out.
- Unlikely to join in this time: Twenty-First Century Fox (FOX +2.2%, FOXA +2.2%), whose own pursuit of Time Warner failed in 2014 at $85/share, and Walt Disney (DIS +1.1%).
- Previously: Time Warner at 15-year highs on merger talk; media companies rise (Oct. 21 2016)
Fri, Oct. 21, 12:02 PM
- Time Warner (TWX +12.4%) is still climbing and cruising to 15-year highs after the WSJ report that it's in advanced talks to be taken over by AT&T (T -3.9%), which is now at its lowest point since February.
- The deal -- which would create a media/telecom giant that would reshape the industry -- would be likely cash and stock, though talks are fluid and might not end in a deal.
- The mix of the deal is likely crucial to its outcome, with Time Warner (not to be confused with Time Warner Cable, now part of Charter Communications) now worth more than $75B -- and a year after AT&T ponied up nearly $49B to take over DirecTV.
- Other potential acquisition targets in media (is anything off the table in a rapidly consolidating sector?) are on the move: DISCA +6.4%, SNI +5.6%, AMCX +4.3%. Lions Gate (NYSE:LGF) made its own move up, +2.4%.
- Engaged in talks about their own re-merger, Viacom (VIA +2.8%, VIAB +4.1%) is up, as is erstwhile and possibly future partner CBS (CBS +2.7%).
Thu, Oct. 20, 9:34 AM
- A re-merger of CBS and Viacom (VIA -0.5%, VIAB -0.3%) could be set by Thanksgiving -- or so Viacom shareholders believe, the New York Post reports.
- Some of those shareholders are holding out hope for something extra beyond an at-the-market all-stock deal, the paper says -- perhaps Dalian Wanda Group with a check for Paramount Pictures (even if that's just financing help on its slate).
- “Perhaps there is a contingent consideration — maybe Viacom shareholders are given an opportunity to get a future payout if targets are met,” a source told the Post.
- With interim CEO Tom Dooley leaving next month, a leading candidate to take over Viacom is Bob Bakish, the president of Viacom International, though depending on the source, there are a number of "leading candidates."
- Previously: Bloomberg: CBS nears hiring of Goldman, JPMorgan on possible Viacom deal (Oct. 14 2016)
- Previously: Viacom confirms MS, Allen, LionTree advising on potential CBS deal (Oct. 14 2016)
Fri, Oct. 14, 6:49 PM
- More firms are set to climb on the CBS-Viacom deal examination train, as the management team at CBS (CBS -0.2%) is close to hiring Goldman Sachs (GS +1.9%) and JPMorgan Chase (JPM -0.3%) to advise it on a possible re-merger, Bloomberg reports.
- While those banks will advise CEO Les Moonves and the leadership, that's separate from the board's special committee hiring Lazard as it announced last week. CBS could add in other banks as well.
- Earlier today, the special committee at Viacom (VIA -0.3%, VIAB +0.5%) confirmed it was working with Morgan Stanley as well as Allen & Co. and LionTree to look at the deal.
- Meanwhile, while Moonves has said he'd want autonomy in running such a combination, Sumner and Shari Redstone (who control the two companies, and have said they don't intend to give up control) reportedly aren't willing to offer Moonves a stake or voting control in National Amusements, the family holding company.
Fri, Oct. 14, 10:28 AM
- Viacom (VIA +0.5%, VIAB +0.7%) has confirmed reports that it hired Morgan Stanley as a financial adviser as it examines potential for a merger with CBS (CBS +0.7%).
- Viacom also engaged Allen & Co. and LionTree to assist in examining the deal. Viacom had also previously hired Debevoise & Plimpton for legal advice, and CBS retained Lazard as a financial adviser.
- The two companies have formed special committees and hired advisers after a request from Sumner Redstone's National Amusements (which controls 80% of each) to examine the prospect of merging back together.
Thu, Oct. 13, 2:25 PM
- Viacom (VIA +1.9%, VIAB +1.8%) is moving up today as analysts raise their takes with discussion centered on the prospect of the company's potential reunion with CBS (CBS +0.4%).
- Bank of America Merrill Lynch boosted the stock two notches to Buy, noting its low valuation and the possible remarriage, but analyst Jessica Reif Cohen says it may take some time for her enthusiasm to pan out. Even without a re-merger, new management (and some restructuring, possibly including asset sales) bodes well for the company's prospects.
- She boosted her price target on VIAB to $44 from $37, implying 23% upside.
- Wells Fargo also upgraded, to Market Perform from a previous Underperform. Analyst Marci Ryvicker sees less downside to Viacom these days, though she too doesn't necessarily think a merger is close.
- "A CBS-VIAB combo does not appear imminent," she writes. "But if/when it does happen, we don’t see CBS paying less than $32-33 in a take-under, which doesn’t present much downside risk (we downgraded VIAB to Underperform on 7/10).
- "The one piece we believe people are missing is incremental programming cost in a VIAB turnaround--we forecast AT LEAST $250MM, which offsets a lot of our initial $400MM synergy est. We cut VIAB ests & reduced the val. range to $33-35. BUT, we upgrade to Market Perform as we believe we’re close to the pot’l floor."
Tue, Oct. 11, 6:39 PM
- If CBS (CBS -0.5%) does end up re-merging with Viacom (VIA -1.6%, VIAB -1.5%), CBS chief Les Moonves should get five interference-free years to run the combination to ensure success, says investor Mario Gabelli.
- "Give him five years ... Say I will stay off your case," says Gabelli of the Redstones, Sumner and Shari. After Sumner Redstone's control of the two companies -- about 80% voting control of each through holding company National Amusements -- Gabelli is the second-biggest shareholder in each.
- The two companies formed exploratory committees and hired advisers to consider a merger at the Redstones' request.
- Moonves, advised by Wall Street lawyer Marvin Lipton, reportedly would want a very free hand in running the company if he were put at the helm of the combination.
Mon, Oct. 10, 6:47 PM
- If CBS (CBS +0.9%) ends up in any remarriage with Viacom (VIA +0.1%, VIAB) -- and the rumblings for that get a touch louder every week -- CBS chief Les Moonves would push for autonomy from the Redstones in running the combination, Reuters reports.
- Sumner Redstone controls both companies with 80% voting rights through his holdings at National Amusements, and that level of independence may be a tough sell. Negotiations haven't begun in any serious manner.
- But sources told Reuters that Moonves would try to capitalize on a decade-long track record of success at CBS. Moonves is reportedly going over his options with Wall Street lawyer Martin Lipton, whose firm has advised CBS for years.
- When CBS merged with Viacom the first time, in 2000, its bylaws gave then-president Mel Karmazin full operating control, and a clause that required three-quarters of the board to fire him. He later resigned over differences with Redstone.
- The two companies have formed independent board committees and hired advisers as they consider a request from the Redstones to look into a merger.
- After hours: VIAB +2%; VIA +0.5%.
- Previously: Ad buyers show enthusiasm at prospect of CBS/Viacom combo (Sep. 30 2016)
- Previously: Viacom committee examining CBS merger is heavy on new members (Sep. 30 2016)
Fri, Oct. 7, 5:50 PM
- CBS (CBS -1.8%) and Viacom (VIA -0.9%, VIAB -1%) are "bankering up" as they consider whether to get back together, a decade after they split apart.
- The special committee at Viacom formed to consider a merger has hired Morgan Stanley (NYSE:MS) to help in its exploration of the process, The Wall Street Journal reports. Meanwhile, the committee at CBS has retained Lazard as financial adviser and hired Morton Pierce, of White & Case, as legal counsel.
- Viacom plans to hire another financial adviser as well, sources told the WSJ.
- It will be tricky to establish valuation for such a deal, with Viacom struggling and CBS thriving. (VIAB is down 18.2% over the past year; CBS is up 37% in that period.) But putting together what would be the year's biggest media deal -- the two have a combined market cap of about $40B -- could mean a bonanza of work for advisers like Morgan Stanley, which advised Viacom last month on its capital review.
- After hours action: CBS +0.3%; VIAB flat.
Fri, Sep. 30, 7:28 PM
- Bond buyers aren't the only ones psyched about the prospect of CBS (CBS +0.3%) and Viacom (VIA +0.7%, VIAB +0.9%) getting the band back together: Advertising buyers are salivating at an improved environment from the possible combination.
- The idea of one-stop shopping especially appeals considering the older audience of CBS combined with younger Viacom brands including Comedy Central and MTV. Buyers would benefit from complementary audiences, ad products and possible discounts if they do bulk purchasing.
- “Viacom is the scrappy kid in the playground willing to try anything once and CBS is the tried and true elder statesman," says Interpublic Group's David Cohen. "The juxtaposition of these two is actually quite exciting and something I’d very much like to see.”
- Despite continuing ratings challenges at Viacom's networks, the company would get a boost from a combined upfront sales event with CBS, making it more similar to the approach of Comcast (NASDAQ:CMCSA) and Twenty-First Century Fox (FOX, FOXA). "“It creates a direct competitor to NBCU like tomorrow,” says one buyer.
- Meanwhile, Viacom's made inroads on the data that advertisers crave with its Viacom Vantage efforts.
Fri, Sep. 30, 4:50 PM
- Viacom (VIA +0.7%, VIAB +0.9%) has confirmed earlier reports that it's created a special committee to evaluate a possible merger with CBS (CBS +0.3%) -- and as expected, it's heavy on the recent Redstone board additions.
- Six directors were put on the committee: Thomas May and Nicole Seligman, who will co-chair, and Kenneth Lerer, Judith McHale, Ronald Nelson and Charles Phillips. The company also confirmed hiring Debevoise & Plimpton as its legal adviser, and says it will retain an independent financial adviser.
- Phillips, a veteran with considerable experience in mergers and acquisitions, is the one who wasn't named to the board this summer by Shari and Sumner Redstone, as part of a settlement between Sumner and the board.
- Previously: WSJ: CBS, Viacom setting up committees to ponder merger (Sep. 30 2016)
Fri, Sep. 30, 1:54 PM
- The boards at CBS (CBS -0.1%) and Viacom (VIA +1.3%, VIAB +1.2%) are keeping the merger-consideration train rolling by setting up special committees to look over a deal -- as Sumner Redstone holding company National Amusements asked them to do.
- Most members of Viacom's special committee will be handpicked by Shari Redstone, focused on the new boardmembers the Redstones added amid the fight with former chief Philippe Dauman this summer, The Wall Street Journal reports. The company was set to appoint directors for the committee this morning.
- “There will be a balance more on the new side than the old side,” a source predicted, though longtime Viacom director Charles Phillips is expected to join due to considerable M&A experience.
- Viacom's committee is reportedly hiring Debevoise & Plimpton to advise it.