Today, 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.
Today, 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)
Today, 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.
Yesterday, 6:27 PM
- Talk of re-merging with CBS (CBS +0.8%) has proved a boon at least for bonds issued by Viacom (VIA +3.9%, VIAB +3.3%).
- Speculation about a combination drove billions of orders into a $1.3B offering that ended up with an $11B order book. "If Viacom and CBS do merge, spreads could tighten in another 20bp," an investor told IFR.
- Meanwhile, despite a Moody's downgrade this month, the ratings agency says that combining with CBS might result in a return to Baa2 ratings for Viacom.
- "The merged entity would benefit under Moonves' stewardship and success in programming networks, as well as from significant cost and revenue synergies," Moody's says.
- The agency had said that "with a pro forma revenue base of $27 billion, a merger would significantly increase the companies' scale and strengthen their negotiating power with pay-TV distributors, suppliers and advertisers. The merged entity's larger scale, strengthened market position and expected higher free cash flows would allow for greater capacity to carry debt on the balance sheet."
Yesterday, 8:10 AM
- As floated yesterday, National Amusements has asked the boards of CBS and Viacom (VIA, VIAB) to consider combining the two companies through what it envisions would be an all-stock deal.
- National makes clear it is not willing to accept or support any acquisition of either company by a third party, or any deal in which National would surrender its controlling position in either company or not controlling the merged company.
- Previously: Viacom jumps to gain on report Redstone's firm to urge CBS re-merger (Sept. 28)
Wed, Sep. 28, 7:30 PM
- Time Warner (TWX +0.9%) and Viacom (VIA +2.7%, VIAB +3.1%) could get a bigger foothold in Latin America as each considers bidding for Telefonica's (TEF +1.5%) Argentine broadcaster Telefe, The Wall Street Journal reports.
- A deal process that's been ongoing for months could culminate in a $400M transaction. Offers are expected within days, with Telefonica making a decision on the deal in October, sources told the WSJ.
- Time Warner already operates a number of channels in Latin America and HBO has a division in the region; its Turner unit has been called the front-runner for the deal.
- Meanwhile, while Viacom is under a heavy debt load, the company thinks a deal could make sense because of Telefe's cash flows.
- Previously: Viacom jumps to gain on report Redstone's firm to urge CBS re-merger (Sep. 28 2016)
Wed, Sep. 28, 11:38 AM
- Viacom (VIA +0.9%, VIAB +1.4%) has spiked into positive ground after a Reuters report that National Amusements -- the holding company of Sumner Redstone that owns 80% voting control of Viacom and CBS (CBS +0.2%) -- is readying a call for the companies to explore merging back into one.
- NAI may contact the companies as soon as this week to pursue the creation of independent board committees to explore the combination, sources told Reuters.
- Viacom as it exists today was spun off from CBS at the end of 2005.
Mon, Sep. 26, 3:30 PM
- Viacom (VIA -1.6%, VIAB -1.9%) is preparing a dollar-denominated bond offering as soon as this week, IFR reports.
- That move will gain some financial flexibility, and won't do anything to dampen reports that it may be considering a sale to CBS (CBS +0.7%), from which Viacom was split a decade ago.
- BofA Merrill Lynch, Citigroup and Morgan Stanley are arranging investor calls for the bond tomorrow and Wednesday, the report said.
- Despite some heavy leverage, the company has said it was planning to raise debt to fund its near-term maturities, Moody's says. That firm downgraded long-term debt ratings for Viacom on Thursday.
Fri, Sep. 23, 3:21 PM
- More fallout at struggling Paramount Pictures (VIA -1.1%, VIAB -0.9%) as its No. 2 executive, Vice Chairman Rob Moore, is headed out of the studio, The Hollywood Reporter says.
- He reportedly won't be replaced.
- With Paramount's fate at the company very much a subject of discussion this summer, Viacom issued a statement in August reiterating support for studio chief Brad Grey: "Shari [Redstone], Tom [Dooley] and the board remain fully supportive of Brad and his leadership of the studio."
- Since that point, Viacom's interim CEO Dooley has elected to leave the company, which is likely looking for a new leader internally.
- Filmed Entertainment at Viacom swung to an operating loss of $26M in the June quarter, vs. a year-ago profit of $48M.
Wed, Sep. 21, 2:01 PM
- Amid today's heavy-duty announcements from Viacom (VIA -1.1%, VIAB -1.1%) where the company said it was looking for a new CEO (again) and cleaving its dividend in half, Viacom also said it was taking a huge $115M impairment charge tied to the "expected performance of an unreleased film."
- That film is not one of the company's high-profile releases for the rest of 2016 (like Brad Pitt-starring Allied, or Tom Cruise-starring Jack Reacher: Never Go Back) but an early 2017 release: Monster Trucks, according to The Hollywood Reporter.
- That film has been pushed back several times, from an initial planned release date of May 2015. It's a 3-D action comedy combining live action and computer animation, starring Lucas Till, Jane Levy, Amy Ryan, Rob Lowe, Danny Glover, Barry Pepper and Holt McCallany.
- The film has an estimated production budget of more than $100M, suggesting it was planned for a broad audience release, but THR says the children-focused nature of the film has Viacom tracking it for more like $25M in revenue.
Wed, Sep. 21, 12:36 PM
Wed, Sep. 21, 10:32 AM
- Viacom shares aren't moving much after tumultuous news that it's slashing its dividend and that its brand-new interim CEO is leaving: VIA +1%, VIAB +1.1% -- likely due to the fact that the company's troubles have been reflected in the price for a while. (Over the past three months: VIA -15.6%; VIAB -16.5%. VIAB is off 19% over the past 12 months.)
- Along with the leadership and dividend change, Viacom guided to Q4 (ending in Sept.) EPS of $0.65-$0.70, light of an expected $0.90. It's taking a $115M programming impairment charge in filmed entertainment for Q4, tied to the "expected performance of an unreleased film"; Paramount has a number of releases yet upcoming this year, including WWII drama Allied (with Marion Cotillard and Brad Pitt), sci-fi Arrival and Tom Cruise's Jack Reacher: Never Go Back.
- Reported EPS for fiscal Q4 is forecast at $0.55-$0.60 after settlement expenses tied to severance.
- "I have been energized by the passion, commitment and ideas put forward by our newly-expanded board and members of Viacom's senior team," says Vice Chair Shari Redstone. "While there is more work to do, the actions announced today are an important first step towards realizing the value of Viacom's exceptional assets and positioning the company for the future."
Wed, Sep. 21, 9:56 AM
- Interim CEO Tom Dooley is leaving Viacom (VIA -0.4%, VIAB -0.4%) just a month after replacing Philippe Dauman, and the company cut its dividend in half as it faced a narrow set of options dealing with $12B in debt.
- The company cut the quarterly dividend to $0.20/share from its previous $0.40. The move was seen as likely as Viacom decided how (and whether) to resist a potential downgrade of its debt. Had the company accepted the downgrade, it would have kept paying the dividend but with higher borrowing costs.
- Viacom also confirmed it won't pursue Dauman's plan to sell a minority stake in Paramount Pictures.
- Dooley will serve through Nov. 15 to smooth any transition, but no succession plan has yet been revealed.
- Viacom says it will "shortly access debt markets in order to improve liquidity and financial flexibility."
Fri, Sep. 16, 7:11 PM
- Unsurprisingly, Viacom (VIA -0.6%, VIAB -0.7%) is abandoning a plan to sell part of Paramount Pictures, Bloomberg reports.
- The company has decided (at least for now) that the venerable studio is one of the company's key assets.
- A sale was a bit of a longshot: Ex-chief Philippe Dauman worked to sell a minority stake (49%) and was reportedly close to a deal with China's Dalian Wanda Group for around $4B -- but such a sale came to be opposed by Sumner Redstone, still in control of votes at Viacom, and his daughter Shari, now with a firmer role at the company.
- The board's been meeting over the past two days to discuss capital structure and the budget, but hasn't given any word on debt management actions, such as cutting its dividend.
Thu, Sep. 15, 12:22 PM
- Facing ever-present questions about a reunion of his company with Viacom (VIA -0.6%, VIAB -1.1%), Les Moonves says CBS isn't in "active discussions" about the recombination.
- But "we are never going to do something that is bad for the CBS shareholders or CBS employees," the CBS chief said in remarks at the BofA Merrill Lynch conference.
- Viacom spun off from CBS in 2005, and the company's poor performance in recent quarters has sharply raised speculation that putting the two back together would unlock value.
- While Moonves says his team would love to have more assets to work with, "The truth of the matter is we're a stand-alone public company. We're happy with the hand we're playing on our own with our own assets."
Wed, Sep. 14, 3:53 AM
- Facing two straight years of a profit and stock price decline, Viacom's (VIA, VIAB) revamped board will meet today to discuss strategic options.
- What's on the menu? The company's capital structure, dividend policy, exploring the recombination of Viacom and CBS, and the possibility of deals involving Paramount Pictures.