CBS Offer For Viacom Will Be Below Current Market Valuation

Sumner Redstone has overwhelming voting control of CBS Corp. and Viacom Inc. And yet, he won’t have the final say over whether the companies merge.

The Wall Street Journal reports that is because the 94-year-old media mogul, whose health has declined so significantly that he cannot speak much beyond grunts, has only one vote on the board of National Amusements Inc., the holding company he controls that in turn owns most of the voting stakes in CBS and Viacom.

Sumner Redstone

National Amusements updated its bylaws in 2016 to make clear that Redstone had a single vote among seven NAI directors in decisions tied to the Viacom and CBS stakes, people familiar with the matter said, despite owning 80% of the holding company’s voting shares. The move, meant to clarify NAI’s procedures partly due to questions about Redstone’s mental capacity, hasn’t previously been disclosed.

A deal to reunite the two big pieces of the Redstone family media empire would cement the rise of Shari Redstone, Mr. Redstone’s daughter. She increased her influence in 2016 after a power struggle with Viacom’s prior management team and since has been pushing for a merger.

A decision on whether to combine CBS and Viacom could come as soon as this month, according to some of the people familiar with the matter.

CBS is close to making an all-stock offer that values Viacom below its current stock price, according to a person familiar with the matter. Analysts largely expect Viacom to get a premium. If the bid is accepted, CBS Chief Executive Leslie Moonves would agree to stay on for at least two years, according to the person.