Viacom, CBS Stock Jump on Report of Planned Merger Talks
CNBC reported Thursday morning that the two companies will begin discussing a potential merger in mid-June.
The shares of both Viacom and CBS Corp. were trading up midday Thursday following a report that the companies are set to resume merger talks in June.
Viacom's stock got the biggest boost from the news. As of 11 p.m. PT it was up around 4 percent from the previous day's close of $27.75. CBS shares, meanwhile, were up around 2 percent from its Wednesday close of $46.72.
Chatter about a long-discussed merger between the two entertainment companies, both majority owned by controlling shareholder National Amusements, was renewed in April after CBS said it would suspend its search for a permanent leader to replace ousted CEO Leslie Moonves and, instead, extend its contract with interim CEO Joseph Ianniello. Observers speculated that Ianniello would shepherd CBS through the merger before making way for Viacom CEO Bob Bakish to run the combined company.
On Thursday morning, CNBC reported that the two companies plan to begin merger discussion in mid-June with Bakish the likely candidate to run the business.
Viacom and CBS operated as a single company for several years until longtime owner Sumner Redstone separated the businesses in 2006. Since then, his daughter, Shari Redstone, has twice tried to reunify the companies. She is currently barred from reinstating merger talks between the two companies as a condition of a settlement with Moonves, who resigned following sexual harassment allegations. The boards of the two companies are not prohibited from initiating those talks.
Executives at CBS and Viacom have been quiet on the subject of a potential merger. Bakish, speaking at the Milken Institute Global Conference at the end of April, stayed mum when asked about the reunification of the two companies, saying, "There's always noise; there's always distractions. You gotta play through and see where it goes."
Representatives for Viacom and CBS declined to comment.