Viacom Inc (NASDAQ:VIA), is hitting back with a counterproposal after rebuffing CBS’s (NYSE:CBS) initial all-stock offer of 0.55 of a CBS share for each Viacom share as negotiations over the media companies’ proposed merger pick up steam.
Arduous negotiations are expected over the deal, which first took shape with CBS offering a low-ball figure that falls below Viacom’s current market valuation of US$12.5bln. Executives at CBS had wanted their current chief executive, Leslie Moonves, and President Joe Ianniello to take the helm at the company for at least the next two years, according to Reuters and other published reports.
As part of the back-and-forth of negotiations, executives with National Amusements Inc., the Redstone family’s holding company and the dominant stakeholder in both CBS and Viacom, want Robert Bakish, Viacom’s CEO, not Ianniello, to be second-in-command at the combined company, according to a Reuters report. They are also looking for CBS to pay more than 0.62 of a CBS share for each Viacom share, which would mean the deal would come as a premium for Viacom’s shareholders, Reuters said.
The respective directions of CBS and Viacom are in the hands of 94-year-old media titan Sumner Redstone’s holding group National Amusements, which owns close to 80% of the voting stakes in both companies.
In afternoon trade, Viacom shares fell 3.1% to US$35.25 while CBS shares were up slightly by 0.74% to US$53.25.