Report: CBS Planning Offer For Viacom

CBS Corp. is preparing to make an offer for sister media company Viacom Inc. in the coming weeks, following a meeting of CBS directors last week in which a potential deal was discussed, according to The Wall Street Journal citing people familiar with the situation.

Representatives of CBS and Viacom have already had preliminary discussions about the outlines of a deal, one of the people said.

If the companies move ahead with talks, it would be a third attempt to reunite the $30 billion media empire that was divided by mogul Sumner Redstone more than 13 years ago.

A deal is far from certain. Determining the price for a stock transaction—which requires setting a value for the companies relative to each other—is one major hurdle.

Picking a new leadership team is another challenge. Viacom Chief Executive Bob Bakish is widely believed by people close to the process to be in pole position to become CEO of the combined company. There is debate and discussion already about how the rest of the management team would fill out, people familiar with the situation said.

Shari Redstone, vice chairman of both companies, believes that CBS and Viacom would be better positioned to compete with larger rivals as one company. She is president of National Amusements Inc., which controls both CBS and Viacom.

Viacom has been the weaker of the two companies over the past several years, having suffered as cable-TV cord-cutting pulled down ratings for its major networks. A merger with CBS would give Viacom greater scale and more leverage in negotiations with advertisers and cable-TV providers.

CBS, which has been propelled by sports and some broadcast-TV hits, could stand to benefit from cable networks owned by Viacom that reach younger audiences, such as Nickelodeon and MTV.

CBS has had challenges, too. The company has had an acting CEO, Joseph Ianniello, since former Chief Executive Leslie Moonves was forced to step down last year in response to allegations of sexual assault and harassment. Mr. Moonves has denied the allegations.

CBS is also battling flagging ratings at its news division and recently reshuffled the lineup of anchors at its flagship news shows under new news president Susan Zirinsky.