Report: Shari Redstone Still Pushing for CBS-Viacom Merger

'WSJ' says vice chairman advocates for new directors
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The rollercoaster ride for Viacom and CBS investors continued Wednesday after the Wall Street Journal reported that one of the biggest shareholders of both companies – CBS and Viacom vice chair Shari Redstone – is attempting to add new directors to the broadcaster’s board as she continues to try to push a deal through.

Viacom stock was up nearly 4% ($1.29 each) to $32.60 per share late Wednesday on the news. CBS shares rose slightly (9 cents) to $59.52 each in late afternoon trading.

According to the Journal, Redstone, who had pulled back her attempt to merge the two companies in 2016, reached out earlier this month to CBS chairman and CEO Les Moonves, who has in the past resisted a merger, to serve as a catalyst toward a recombination.

The paper said she is gathering a slate of possible directors ahead of CBS’s May annual meeting of shareholders, where several directors are expected to be replaced.

Moonves has resisted past attempts to put the two companies together because like other analysts, he sees little benefit for CBS, according to reports. But with large media companies moving to get larger – like Disney’s pending $66.1 billion purchase of certain 21st Century Fox assets and Discovery Communications $14.6 billion buy of Scripps Networks, expected to close in the first quarter, the urge to merge is greater than ever.       

Viacom and CBS split in 2006 in an effort to unlock value at both companies. But since then, CBS has flourished, growing into the top rated broadcaster in the country with a strong OTT service (CBS All Access) and a steady premium channel (Showtime). Viacom, which endured some extreme management turmoil over the past few years, has struggled to get back on track as its networks have slipped in the ratings and the ad market has dwindled.

TheWrap first reported that Redstone was eyeing a reconstituted CBS-Viacom on Friday. That resulted in a 7% runup in Viacom’s stock price on Jan. 12 that was eroded on Jan. 16 after reports surfaced that no formal talks were being held.

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