After months of talks to the contrary, National Amusements, the holding company that houses Sumner Redstone’s 80% voting control of both CBS and Viacom, has asked the boards of both companies to discontinue their merger talks.
In a brief statement, National Amusements said it has asked the boards of directors of both companies to stand down on merger talks.
“Over the past few months, after careful assessment and meetings with the leadership of both companies, we have concluded that this is not the right time to merge the companies,” National Amusements said in a statement.
Viacom shares plunged on the news, down 6% ($2.25 per share) in early trading to $36.37 each. CBS shares fell 3.2% ($1.99) to $60.57 per share.
National Amusements started the talks rolling in September, when it officially asked the boards of both companies to pursue a merger. The idea was that CBS’ retransmission consent power and strong broadcast and cable networks would help bolster Viacom’s sagging fortunes. The once iconic kids’ and teens programmer has struggled with falling ratings and talent defections across its networks.
The troubles helped force out Viacom CEO Philippe Dauman in August and last month the company named long-time executive Bob Bakish as acting CEO. While Bakish was initially thought to be keeping the CEO seat warm while Viacom searched for a more high profile leader, according to reports vice chairman Shari Redstone has thrown her support behind the acting CEO.
According to CNBC, Shari Redstone, one of the main backers of a CBS-Viacom merger, has apparently changed course and is supporting Bakish’s plan to fix the company.
“Following the management changes that the Viacom Board put in place, we have been very impressed with the forward‐looking thinking and strategic plan being pursued under Bob Bakish’s leadership,” National Amusements said in the statement. “We know Viacom has tremendous assets that are currently undervalued, and we are confident that with this new strong management team, the value of these assets can be unleashed. At the same time, CBS continues to perform exceptionally well under Les Moonves, and we have every reason to believe that momentum will continue on a stand‐alone basis.”