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.
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."
Mon, Aug. 29, 10:47 AM
- Philippe Dauman's last stab at selling some part of Paramount Pictures is a key catalyst that likely indicates the fate of parent Viacom (VIA +0.6%, VIAB +0.3%) as a stand-alone company, Brean Capital says.
- With Dauman's non-executive chairmanship ending in two weeks, he has a last effort to sell a stake or all of the venerable (but struggling) studio. He was said to be discussing a sale of 49% of Paramount to China's Dalian Wanda Group for around $4B, though Sumner Redstone (in control of voting power at Viacom) reportedly opposes such a move.
- A merger hangs in the balance of that transaction, says Brean's Alan Gould. If the board goes for such a deal, it's an indication that it will "leave Viacom as a standalone company and the stock will go down and CBS will go up. If the Board does not approve the transaction, then we view that as an indication that the Board will try to remerge CBS and VIA which would be positive for VIA shares and near-term negative for CBS."
- Assuming such a re-merger, the firm has an upside target for VIAB of $46, 11.5% upside from current pricing. As a stand-alone, Brean sees VIAB at $38, implying 7.9% downside.
- As for CBS, Brean has a Buy rating and a price target of $51.44 (where the stock is trading at currently).
- Alan Gould ranks No. 1,547 off 4,127 analysts rated at TipRanks.
- Previously: Viacom: Pressure mounts on underperforming Paramount (Aug. 24 2016)
Tue, Aug. 23, 10:57 AM
- Keeping up a push by Chinese firms into Hollywood, China's richest man says he has two billion-dollar deals in the pipeline and an eye beyond that to taking over one of the industry's Big Six.
- Wang Jianlin, of Dalian Wanda Group, tells Reuters that after acquiring a pair of non-production companies, he'd like to take over one of the major studios: Twentieth Century Fox (FOX, FOXA), Warner Brothers (NYSE:TWX), Walt Disney (NYSE:DIS), Universal Pictures (NASDAQ:CMCSA) and Columbia (NYSE:SNE), along with Paramount (VIA, VIAB), for which Wanda was said to be nearing a $4B purchase of 49%.
- Paramount is certainly in play, with flagging performance and a parent (Viacom) struggling with that and its TV business. But that's not all Wang has his eye on: "We are interested not only in Paramount, but all of them. If one of the Big Six would be willing to be sold to us, we would be interested."
- That's a "necessary step" to building a "real movie empire," Wang says. "Only the six are real global film companies, while the rest are not."
- Wanda bought control of production company Legendary Entertainment for $3.5B this year and wants to triple revenue from its cultural division to 150B yuan ($22.6B) by 2020.
- The conglomerate also controls theater firm AMC Entertainment, and with the completion of acquisitions of Odeon & UCI Cinemas Group and Carmike Cinemas, would control 15% of global box office revenues.
Fri, Aug. 19, 2:31 PM
- Shares of Viacom (VIA +1.6%, VIAB +1.2%) are up today after news of the culmination of its legal drama, including the departure of CEO and Chairman Philippe Dauman.
- A reported settlement of legal action between the company and controlling shareholder Sumner Redstone last night brought an end to months of wrangling over Redstone's decisions and mental competence.
- Dauman is exiting by the end of September with a $72M parachute, and the board is then expected to make a decision on whether interim CEO Tom Dooley, a longtime Viacom veteran, will take over the job permanently.
- Some observers are turning attention to the bigger picture -- what's next to fix a flagging business with declining ratings in its TV unit. Doug Mitchelson of UBS lays out priorities: Balance sheet issues (3.4x TTM net debt/EBITDA); content performance that might call for operational changes; all-time low distributor relationships (Mitchelson suggests ending SVOD sales); and a "lot of fat" still in the cost structure.
- Meanwhile, the ascendance of Shari Redstone among the company's decision-makers has many investors looking at a not-unlikely next step: pursuing a re-merger of Viacom with CBS (NYSE:CBS). Viacom had acquired CBS for $37B in 2000, and the two companies split at the beginning of 2006.
- Analyst Michael Nathanson is all for a reunion to fix a "major mistake": “We find it hard to believe that anything will be solved until the CBS-Viacom pieces are put back together. And even then, the combined assets would not be that much of bargain relative to its peers." He says Viacom needs to fix its biggest problem by selling "100% of Paramount to the highest bidder," before turning to cable programming problems.
Fri, Jul. 15, 11:41 AM
- Unsurprisingly, National Amusements -- Sumner Redstone's holding company, which owns 80% control of Viacom (VIA -2%, VIAB -1.8%) -- is reaffirming its opposition to any deal to sell a stake in Paramount Pictures.
- That comes after fresh news that Viacom has held talks with China's Dalian Wanda Group over selling 49% of the studio. This spring, amid a battle for control of Viacom, Redstone reportedly expressed opposition and displeasure with the reports that Viacom would consider a sale of his "baby."
- Selling a Paramount stake is bad for shareholders and even limits other strategic options, National Amusements says in a statement: “Any short-term benefits that might result from a Paramount transaction would be outweighed by the severe negative impact on Viacom’s future strategic flexibility to best capitalize on this important asset.”
- That means NA could go for a deal in the future, as it said the studio's fate shouldn't be decided by people “who may be leaving the board shortly" -- directors ousted by NA but allowed to stay on while multiple court cases go forward.
- Updated: Viacom responds. "It is beyond understanding that 'National Amusements' would continue in its attempts to interfere with a potential transaction that would create a unique opportunity to drive long-term value for both Paramount and Viacom, without even waiting for the facts. We will continue to pursue the best outcome for all of Viacom’s shareholders."
Wed, Jul. 13, 4:57 PM
- Dalian Wanda Group, an unsurprising suitor when it comes to U.S. movie assets, has held talks with Viacom (VIA -1.2%, VIAB -1.4%) about obtaining a minority stake in Paramount Pictures, Reuters reports.
- That's if the stake still ends up for sale. In February, CEO/Chairman Philippe Dauman confirmed that he decided to pursue talks with investors over selling the piece of the venerable studio, but that was before a burgeoning feud with chief voteholder Sumner Redstone revealed reports that Redstone didn't want Viacom to let go of any of Paramount.
- Redstone's National Amusements amended Viacom's bylaws to require unanimous approval for such a sale.
- Chinese conglomerate Wanda, meanwhile, bought Legendary Entertainment in January, already owns cinema chain AMC, and has notably had eyes on expanding its movie business in the U.S.
Thu, Jul. 7, 12:09 PM
- In a Sun Valley media conference tradition, cable mogul John Malone weighed in on one of his most frequent questions: evaluating the current environment for mergers and acquisitions.
- "There's always M&A opportunities," he said. "I have nine different public companies I'm involved in, and they're always looking for opportunities."
- As for cheaper European assets post-Brexit: "Cheap is a relative term; I think it depends on your longer-term view. I think Britain's gonna be fine; I think the EU is gonna be fine. I think there are gonna be some banking, capitalization issues that have to be dealt with."
- He's coming off a $4.4B deal to combine his Starz network (STRZA +1.8%) with Lions Gate (LGF +3.1%), and "they're both subscale ... this gives them the opportunity to be bigger, be a little more aggressive in investing in content, trying new things."
- Malone's more interested in the TV business, but Lions Gate will get a new outlet for its films after tough times at the box office: "Theatrical is a tough business and you can run hot and cold ... The question is can you tame the movie business to reduce the volatility?”
- Asked about Viacom (VIA +3.1%, VIAB +3%) -- currently embroiled in a succession drama and (logically) speculation about combining it with other firms: “I’m hoping that all settles down and everybody is treated fairly,” said Malone. “Sumner [Redstone's] been a long-term friend and sometimes partner and sometimes 'frenemy.' You hate to see the stress of a family situation. I certainly hope it all works out to everybody’s benefit."
- On Viacom's sale of a Paramount stake: "Would I? The theatrical side? No, that would not be where I would go." But Viacom has "got some great assets and right now because of the turmoil they're substantially undervalued."
Mon, Jun. 20, 12:30 PM
Wed, Jun. 15, 8:37 AM
- Shari Redstone, has been in direct contact with Alibaba (NYSE:BABA) founder Jack Ma in connection to a sale of Paramount Pictures, sources told the NY Post.
- Meanwhile, National Amusements - Viacom's (VIA, VIAB) controlling shareholder - has started talks with investment banks about the Paramount sales process to gather more information about a potential deal.
- Viacom had hoped to use the proceeds from the expected $7B sale of 49% of the studio to pay down debt and perhaps boost its share price by $10.
- Sources also said the Redstones have reached out through back channels to DreamWorks (NASDAQ:DWA) CEO Jeffrey Katzenberg to see if he has an interest in running Viacom.
Mon, Apr. 25, 6:13 PM
- China's DMG Entertainment is getting out in front of a bidding deadline for a minority stake in Paramount Pictures (VIA -1%, VIAB -1.2%), hiring J.P. Morgan to engage on its due diligence, Variety reports.
- The disconnect between Viacom (which wants to sell a smaller piece) and bidders who want the studio outright is also discouraging some suitors; Skydance and Twenty-First Century Fox (FOX +0.6%, FOXA +0.4%) are not expected to bid actively, Brent Lang notes.
- Chinese firms continue to be prominent among likely partners for Paramount, as they'd give it more of a foothold in the world's fastest growing cinema market. DMG is worth about $5B and recently partnered with Hasbro to create a live show based around the toymaker's Transformers robots.
- Now read Viacom: Opportunity Hidden In A Soap Opera »
Wed, Mar. 30, 12:24 PM
- Twenty-First Century Fox (FOX +0.1%, FOXA +0.3%) is one of the companies interested in taking the minority stake in Paramount Pictures that Viacom (VIA +0.1%, VIAB +0.2%) has put on the block, The New York Post has reported.
- That would put Fox into competition with several Asian firms interested in a piece of the historic studio, which has been under pressure (along with its parent Viacom) with a focus on an underperforming film slate.
- And Viacom has given Fox a cold shoulder so far, sources said, which suggests it may be looking for a more passive partner. With a 5.9% share of the film business, Paramount could help provide a boost for Fox, which has about an 11.3% market share in films.
- Fox, meanwhile, may be of a mind with other U.S. suitors like DreamWorks Animation that would prefer buying the whole studio to taking a minority stake.
- Previously: Viacom draws interest for minority stake in Paramount (Mar. 18 2016)
- Previously: Liberty Media an unlikely bidder for Paramount stake (Mar. 07 2016)
- Previously: Katzenberg 'fantasizes' about DreamWorks Animation-Paramount merger (Mar. 01 2016)