For weeks now reports have been swirling around about CBS and Viacom’s latest effort to recombine and one analyst thinks that a remerger is “probably inevitable.”
Neil Begley, senior vice president at Moody’s, said that despite earlier hiccups in CBS and Viacom’s lengthy remerger saga, recent media M&A deals like Disney-Fox and Comcast-Sky will push the two companies back together.
Begley said any CBS-Viacom merger deal has hurdles it needs to overcome. Mainly, determining valuations and premiums for each company, and establishing governance for the combined company. Moody’s report assumes that the companies would merge in an all-equity deal with $500 million of revenue and cost synergies.
“While it is premature to forecast given the many unknowns, we believe that the potential combined company will be stronger than its parts, particularly in facing the escalating stake in the television ecosystem,” wrote Begley.
In May, CNBC reported that CBS and Viacom were on track to begin remerger negotiations in June.
CBS and Viacom’s previous remerger talks in 2018 dissolved into a bitter feud as CBS sought to dilute majority shareholder National Amusements’ voting power within the company. CBS accused NAI’s Shari Redstone of interfering with the CBS board nomination process, of acting to undermine CBS’ “highly lauded and successful management team in a series of escalating attacks,” and blocking another unnamed acquisition partner from pursuing a deal with CBS.
The legal dispute was settled in September 2018, and Chairman and CEO Les Moonves left the company after several accusations of sexual misconduct were leveled against the longtime CBS executive.