Viacom stock fluctuated amid conflicting reports of CBS remerger

CBS and Viacom formally split 12 years ago. (Image: Ben Munson)

Viacom stock was set off on a bit of a roller coaster ride when conflicting reports surfaced about Viacom and CBS had reignited discussions about recombining.

Last Friday afternoon, The Wrap reported that Shari Redstone, vice chairman of both CBS and Viacom, and president of National Amusements, which controls both companies, was pursuing a remerger for the companies and that CBS CEO Les Moonves was on board with the idea.

Viacom stock shot up nearly 10% at the end of trading Friday as a result of the report.

But shortly after that, Reuters issued a report contradicting the remerger talks. Reuters sources said that Redstone is having exploratory conversations with CBS directors about recombining the companies but that the companies are “not in active merger discussions.”

RELATED: National Amusements calls off CBS-Viacom remerger

It’s been about 12 years since CBS and Viacom formally split. In 2016, National Amusements began the process of recombining the companies before eventually deciding to back off the plan and allow Viacom CEO Bob Bakish pursue his plan to right the ship at Viacom.

“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,” wrote Redstone. “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. 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.”

Since that time, Viacom has seen an uptick in ratings for some of its networks and managed to hammer out a new carriage deal with Charter.

“Management has been executing on its turnaround strategy, including improving ratings, upcoming cost realignment and delivering on affiliate renewals,” said UBS analyst Doug Mitchelson in a research note.