Viacom, CBS Shares Rise After Report Suggests New Merger Talks Have Started

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Shares of each Viacom Inc. and CBS Corp.  rose noticeably Friday after a brand new report advised the 2 firms, each managed by the Redstone household, might as soon as once more be contemplating the prospect of merging.

A report in The Wrap advised Shari Redstone, president of the household’s National Amusements movie-theater chain, had just lately sparked new discussions throughout the firms a few attainable merger. Her father, Sumner Redstone, had mixed CBS and Viacom in 2000, solely to tug them aside six years later.  National Amusements in September of 2016 formally requested that the boards of each firms take into account the opportunity of a brand new merger on an all-stock foundation, then stopped the process at the end of that year.

CBS declined to remark.  A Viacom spokesman didn’t instantly reply to a question in search of remark.

The report comes as extra media firms are contemplating tie-ups that will give them a bigger footprint in a sector that has been flummoxed by new know-how and shopper patterns. Monetizing viewership of content material has develop into tougher as customers migrate to new video screens and behaviors that aren’t measured as simply, crimping the circulate of promoting help and undermining media firms’ capacity to lock in charges from distributors.

To struggle again in opposition to these tendencies, a variety of distinguished media firms have set large acquisitions or outright mergers. Among the current combos: Charter Communications and Time Warner Cable and Lionsgate and Starz. Other tie-ups have been proposed however not accomplished. Discovery Communications is predicted to finalize its buy of Scripps Networks Interactive later this yr. AT&T is pursuing authorized choices to finalize its proposed merger with Time Warner. And Walt Disney has agreed to buy a considerable chunk of 21st Century Fox, together with the 20th Century Fox film studio, the FX and National Geographic cable networks and a passel of regional sports activities operations.

The firms that don’t embrace different belongings have begun to look significantly smaller.

If a merger is being mentioned, it isn’t on a quick observe. An individual accustomed to the scenario advised no substantive steps in any course of have been happening on the present time.

Viacom shares reacted shortly to the information. Shares of the corporate, which controls MTV, Nickelodeon, Comedy Central and the Paramount film studio, rose practically 10% Friday, or $2.95 a share, to $33.76 a share from $30.90. Volume was robust – 12.45 million shares – in comparison with common quantity of 5.07 million.

Shares of CBS rose extra modestly, up 1.85%, or $1.07 a share, to $58.83 a share from $57.78. Volume was 6.19 million in contrast with common quantity of four.01 million.

CBS has fared nicely in current months, regardless of its medium dimension within the sector. The proprietor of the CBS broadcast community and the Showtime cable outlet has in current months centered on maximizing the income it attracts from its content material by scrutinizing the charges it attracts from retransmission and abroad syndication. Rather than make large acquisitions, CBS has launched a spate of recent digital companies, together with the “CBS All Access” subscription video on demand service and a streaming-video information product, CBSN, that makes new use of content material from CBS News. Leslie Moonves, the corporate’s chairman and CEO, has mentioned the launch of a brand new streaming-video sports-content service and CBS has unveiled fascinating plans for “All Access,” like a revival of the traditional collection, “The Twilight Zone.”

Viacom, in the meantime, has labored to recalibrate itself underneath a brand new chief. Bob Bakish took over as CEO of the corporate in December of 2016 and has since that point reorganized the corporate and positioned new leaders in command of MTV and set about to remodel the corporate’s Spike cable outlet right into a extra general-entertainment property known as the Paramount Network. A launch is slated within the days forward. Bakish has additionally positioned extra emphasis on occasions associated to a number of the firm’s large belongings, together with a brand new pageant launched by Comedy Central.

 

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