Are CBS And Viacom Looking To Reunite?

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Viacom ( VIAB ), after surging during the regular session on chatter that it was looking to merge with CBS ( CBS ), is now sliding late on further reports suggesting negotiations are not ongoing.

[ibd-display-video id=3023638 width=50 float=left autostart=true] CBS shares rose 1.8% to 58.83 in the stock market today,  then moved above 59 in late trading. Viacom shares settled 9.6% higher at 33.76, with most of those gains coming just before the close. Viacom retreated 2% late.

Shari Redstone, vice chair of the board at CBS and non-executive vice chair of the board at Viacom, was reportedly looking to reunite the two media giants, according to an initial report from entertainment outlet TheWrap , citing multiple inside sources.

But soon after, CNBC  that said the two media companies are not in active merger talks, citing multiple reports.

UPDATE: Viacom & CBS are not in active merger talks, 2 reports say. $VIAb shares now down 2% after hours following spike into the close on initial report. https://t.co/G1aKzuHiHQ pic.twitter.com/tDhd0zShfU

- CNBC (@CNBC) January 12, 2018

This would not have been the first time a Redstone has pushed for a CBS-Viacom merger since they split over a decade ago. In 2016, Sumner Redstone's National Amusements - of which daughter Shari is president - sent Viacom a letter asking for an all-stock merger with CBS . (National Amusements controls around 80% of both Viacom and CBS voting shares.)

But Viacom shut down talks later that year, after the younger Redstone pulled the plug on the proposal, supporting then-new Viacom chief Bob Bakish and telling Recode last year that there was better value in CBS and Viacom remaining separate.

But that was before Walt Disney ( DIS ) agreed to acquire 21st Century Fox ( FOXA ) entertainment assets. TheWrap said Redstone believes the companies need to have a bigger footprint to succeed.

Viacom owns Comedy Central, MTV, Nickelodeon and more, with teen and children's programming heavily exposed to Netflix ( NFLX ) and other streaming options. CBS is the most-watched broadcast network by catering to an older audience that is most likely to watch traditional TV as opposed to Netflix or mobile viewing.

A key person in any move to merge is CBS head Les Moonves, who in the past has been reluctant to combine the network with another entertainment entity.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
Referenced Symbols: VIAB , CBS , DIS , FOXA , NFLX

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