Viacom/CBS Deal Sees Rising Counter Offer and Presidential Role for Bakish

Viacom

NEW YORK – CBS and Viacom continue to bargain. On Monday, Viacom countered CBS’ initial acquisition offer, adding about 24 percent in valuation to the opening proposal, according to several national media sources. 

Viacom is also seeking a role for Bob Bakish, specifically as president and chief operating officer at the new company.

The counter-offer would value Viacom at $14.7 billion, though because this is an all-stock deal, any ultimate value of a completed transaction would come down to fluctuating share prices.

However, Broadcastingcable.com is reporting CBS will likely reject that offer, citing two people close to the negotiations. 

Initially, CBS had proposed a share exchange ratio of 0.55, which would value Viacom at $11.9 billion. Viacom believes that to be a low-ball offer, while CBS does not. At the time the value became public, it did place a dollar amount on Viacom that was below its market cap. Additionally, executives at CBS want Leslie Moonves’ team to stay in place, which means Joe Ianniello would remain COO under CBS’ terms.

Insiders say both companies believe there is a case to be made for their version of an envisioned hierarchy: Bakish is a popular boss in a media-facing role, but Ianniello has helped guide the financials of the clearly more successful corporation.

CBS and Viacom were a single company once before, though they spun off from one-another back in 2005. Since then, CBS has been the more successful of the two publicly traded corporations.

Both companies are controlled by the Redstone family. The ailing Sumner Redstone’s holding company National Amusements Inc. carries about 80 percent of the voting shares for both CBS and Viacom, and his daughter Shari Redstone is a vice chairman for each. She’s been leading the charge for CBS and Viacom to recombine. 

Some sources have said Shari Redstone favors adding Bakish to the management mix at the combined company because he owes his job to her and would give greater weight to her suggestions, as opposed to management at CBS, which has been seeking assurances that it would be able to operate as independently as possible from its owners.