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Special committees named to look into merger of CBS and Viacom
MUMBAI: The boards of Viacom and CBS have respectively formed special committees to consider merger of the two companies.
This follows a day after Sumner Redstone’s National Amusements publicly urged the two media companies to look into a possible merger. The two companies were together till 2006 when a spin-off happened.
National Amusements owns a majority of CBS and Viacom’s voting stock.
Viacom’s board formed a special committee consisting largely of newcomers selected by Redstone’s daughter, Shari. Similarly, the board of CBS formed a special committee to consider a potential merger.
In the letter transmitted to the respective boards, director Shari Redstone said that the belief is that a combination of CBS and Viacom might offer substantial synergies that would allow the combined company to respond even more aggressively and effectively to the challenges of the changing entertainment and media landscape.
“As a result, we would like both companies’ boards to consider a potential combination of the companies. Our tentative view is that the optimal structure would be an all-stock transaction in which the stockholders of each company would receive shares in the combined company of the same class as they currently hold.
We therefore request the board of each company take the appropriate steps to consider the proposed transaction. We believe that any transaction should be the result of full and fair deliberation and negotiation, and that any transaction would proceed only if it is approved by each board.
“None of Sumner M. Redstone, Shari E. Redstone or David R. Andelman will vote as directors on the consideration of this matter by either company’s board, and none will participate in any of the related deliberations.
“To avoid any doubt, National Amusements is not willing to accept or support (i) any acquisition by a third party of either company or (ii) any transaction that would result in National Amusements surrendering its controlling position in either company or not controlling the combined company. We believe moving forward expeditiously, but with due care, is important and we are prepared to be of assistance to the two companies as they explore this possibility.”
In response, Viacom said that it expects that its board of directors will form a special committee of independent directors to carefully consider the request from National Amusements and any proposed transaction.