Wednesday Morning Update: Viacom rejects initial CBS offer
According to CNBC and Hollywood Reporter, Viacom has rejected CBS’ first purchase offer. As previously reported, the two main issues are the valuation and the future role of Viacom CEO Bob Bakish. Viacom is expected to make a counter proposal, with Reuters reporting it may come on Thursday. While there is no specific timetable, both corporations are reportedly interested in finalizing talks before quarterly earning reports in May.
Tuesday Evening Update: CBS makes its opening bid
According to multiple reports, CBS has made a formal offer to acquire Viacom at a valuation that is below Viacom’s current market value. The deal stipulates that current CBS CEO Leslie Moonves would run the combined entity along with CBS COO as second in command. It is not clear where this would lead Viacom’s current CEO Bob Bakish. The Hollywood Reporter outlines the next steps:
Now it will be up to Viacom’s special board committee to respond. One analyst immediately suggested it would push for a premium price and likely also urge the combined company to retain Bakish, given his turnaround efforts and the fact that controlling shareholder National Amusements has been happy with his work.
If the parties come to an agreement, this can bring together the current owners of the Star Trek franchise back under one roof, as they were before Viacom and CBS split in 2006.
CBS Readying Bid For Viacom, But Management Issue Has Become Roadblock
We have been following the ongoing merger talks between CBS and Viacom (parent company of Paramount), who share share control of the Star Trek franchise. The financial press are reporting this week that CBS is preparing a low-ball bid for Viacom, which is a bit unusual for mergers, but analysts expect the offer is just a starting point. According to CNBC this morning, the main snag at this point has to do with the management structure of the new combined entity.
It has already been decided that current CBS CEO Leslie Moonves would run the re-merged CBS/Viacom, but there is a debate over who would be the number two in the organization. According to CNBC, Moonves wants his current number two, CBS COO Joe Ianniello to get the job. However, Shari Redstone, who holds controlling stock in both companies, favors Bob Bakish, who has been Viacom’s CEO since 2016.
Viacom could make offer for CBS
Variety is also reporting today that the CBS low-ball bid and Moonves’ management demands could end up creating a situation where the deal is reversed, with Viacom becoming the acquiring entity, noting: “The certainty that the negotiations between the Viacom and CBS boards will be difficult has also raised the prospect of the tables turning with Viacom making an all-stock offer for CBS.”
As noted in previous merger talk updates, the reunification of Viacom and CBS could have a significant impact on the future of the Star Trek franchise. However, these late negotiating points mean little with regards to Trek, except as a reminder that merger is not a done deal. We have been here before, as CBS and Viacom scrapped a proposed merger in late 2016.
TrekMovie will continue to keep an eye on all the corporate action and provide updates when there is something new to report. You can read our previous reports in the CBS/Paramount news category.