Viacom Inc. and CBS Corp are not in active merger discussions, although controlling shareholder Shari Redstone has had exploratory conversations with CBS directors about recombining the companies, two sources familiar with the situation told Reuters on Friday.
CBS and Viacom are both controlled by ailing Sumner Redstone, 94, and his daughter Shari, through their privately owned movie theater company, National Amusements Inc.
Sumner Redstone split Viacom and CBS into separate companies a decade ago. He and his daughter attempted to merge the two in 2016, but the effort failed.
Entertainment and media news website The Wrap on Friday reported that Shari Redstone was seeking to merge Viacom and CBS, sending Viacom shares up as much as 15 percent, to $35.55.
Viacom shares fell, but were still trading up 7 percent in after hours trading following reports that a merger was not being pursued.
Redstone, who serves as vice chair of both companies, has expressed her feelings to the leadership and boards of the two entities, according to the sources.
“Shari is determined to get them back together,” said one of the sources. “Everything else she could think of went nowhere.”
I was never a great proponent of the split of the two companies,” she said at a media conference in November 2016.
Earlier that fall, Redstone announced that she wanted the two companies to explore a merger and board-level exploration committees were formed. The stronger CBS began evaluating whether to acquire Viacom, but the talks fell apart in December 2016 over a valuation of Viacom, which has seen its stock fall more than 50% since early 2015.
Redstone also decided that she wanted to give Viacom Chief Executive Bob Bakish — who was appointed at the end of 2016 — a chance to turn around the company.
But much has changed in the last year. Key Viacom cable channels continue to struggle with ratings declines and accelerated cord cutting. Viacom generates its profit from cable TV channels, so the shrinking universe of pay-TV homes makes it more difficult to grow its business.