Report: Wall Street Hoping For Viacom-CBS Reunion

Les Moonves

The ink is barely dry on Viacom’s settlement with outgoing CEO Philippe Dauman and already Wall Street is hoping that the slumping entertainment giant will reunite with former sibling CBS, led by longtime chief Les Moonves.

A tight-lipped Moonves, who managed to stay out of the spotlight during all the drama, may need some persuading, however, according to the NY Post.

The two companies are in the control of media mogul Sumner Redstone and his daughter Shari after they prevailed in a boardroom battle with Dauman. The Redstone family holds the controlling voting shares of Viacom and CBS through their National Amusements Inc.

“The right fix for National Amusements is to combine Viacom and CBS in stock-for-stock merger which creates massive cost synergies and puts a real programmer in charge of the business,” media analyst Michael Nathanson said in research note. “However, CBS management has long dismissed the value this brings to their strategy and will need to be re-incentivized to do this.”

Gamco’s Mario Gabelli, a top shareholder of both Viacom and CBS, said one possible way to get Moonves on board is to offer him voting control and free rein.

NAI controls around 80 percent of the voting shares in both CBS and Viacom even though it has a small economic stake.

To prevent another legal saga like the one with Dauman, NAI could structure it so that Moonves’ voting power expires after five years, Gabelli said.