CBS Board to Prepare for Merger Talk at Its January Meeting
(Bloomberg) -- When CBS Corp. board members go to Los Angeles for their Jan. 31 meeting, they’ll have more on the agenda than just a tour of the local TV studios.
The 11-member panel is expected to discuss both the hunt for a permanent chief executive officer and the possibility of a merger with Viacom Inc., according to people familiar with the situation. The directors are likely to ask CBS’s financial advisers to look at strategic options -- including, but not limited to, a possible Viacom deal -- said the people, who asked not to be identified because the deliberations are private. A decision on whether to pursue a tie-up could come within weeks.
Viacom Class B shares rose as much as 1.8 percent to $29.22 in New York trading Wednesday, while CBS shares fell as much as 1 percent to $47.89.
The possibility of a Viacom deal has been the elephant in the room since the departure in September of longtime CEO Les Moonves, who was fired after allegations of sexual harassment and assault. He had opposed the merger -- a move long championed by the Redstone family, which controls both companies -- because of concerns about who would manage the combined business. Since the ouster, Joe Ianniello, formerly Moonves’s deputy, has been running CBS as acting CEO.
At the time of Moonves’s departure, the Redstones agreed to not propose a combination again for at least two years, but there’s nothing stopping the independent directors of both companies from seeking a transaction.
CBS declined to comment, while Viacom didn’t immediately respond to a request for comment.
The New York Post reported earlier this week that CBS’s board may renew Viacom talks as soon as this month, with the hopes of sealing a deal by March or April.
A deal would reunite the owner of the most-watched broadcast TV network last year with Viacom’s film-and-cable empire, which includes the Paramount Pictures studio, MTV and Nickelodeon. They had been the same company until a split more than a decade ago.
In more recent years, they’ve been pursuing somewhat different strategies. To adapt to the streaming era, CBS launched its own monthly subscription service, CBS All Access, while Viacom has been signing content production deals with services such as Netflix Inc.
The past four months have been a period of upheaval for New York-based CBS. A board shake-up has brought six new members, and they have spent time getting acquainted with the company and its culture.
Ianniello, meanwhile, has been trying to put his imprint on the media giant. The executive is a contender to become permanent CEO -- depending on the course CBS takes in the coming months -- and he wants to show that the company has turned a page after the Moonves scandal.
That’s included appointing more women to top roles. He named Laurie Rosenfield chief people officer in October and put Susan Zirinsky in charge of CBS News this week. Zirinsky, an inspiration behind Holly Hunter’s character in “Broadcast News,” is overseeing an organization with its own record of misconduct. Jeff Fager, a “60 Minutes” executive producer who previously ran the news department, was fired in September for violating company policies. In 2017, CBS terminated longtime TV personality Charlie Rose over allegations of harassment.
For the CEO search, executive-recruiting firm Korn/Ferry International has been interviewing board members to gauge what they want in a new chief. Experience with big mergers is one criterion they have discussed. A CBS representative is said to have been reaching out to some potential candidates, including former Walt Disney Co. Chief Operating Officer Tom Staggs. A list of contenders is unlikely to be presented at the meeting this month, however.
Strauss Zelnick, a friend of Shari Redstone and the CEO of video-game maker Take-Two Interactive Software Inc., stepped in to be interim chairman of the company in October. He’s expected to take a lead role in discussions of a possible merger. Zelnick has said he’s not interested in serving as CEO of the combined companies, but he hasn’t commented on whether he might stay on as permanent chairman.
Viacom CEO Bob Bakish would be a leading contender to run a combined business.
If a deal is proposed, it could be a speedier process than the last time, when subcommittees of the boards of both companies were formed to explore the combination. At the time, the boards agreed on economic terms -- the price was a ratio of 0.6135 CBS share for every Viacom Class B share. A deal will require the approval of two-thirds of the independent directors.
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