Viacom apparently wasn’t impressed with a below-market bid from CBS as the two companies try to come to terms on a merger that would reunite the former corporate siblings.
Reuters reports that Viacom is readying a counterproposal to the offer reportedly made verbally last Friday by CBS Corp. — a share exchange offer of 0.55 CBS share for every Viacom share, valuing Viacom below its market value of around $12.5 billion, according to sources.
“The back-and-forth between the companies indicates that tough negotiations lie ahead,” Reuters reports. “Viacom has not yet decided on the exact share exchange ratio it will ask for, but is expected to seek more than 0.62 CBS share for every Viacom share, one of the sources said. Viacom’s counterproposal is expected by Thursday, another of the sources added.”
Along with price, there appears to be a sticky issue about corporate management.
“National Amusements Inc., the controlling shareholder of CBS and Viacom, wants Viacom CEO Robert Bakish to be No. 2 in the combined company, the sources said,” Reuters reports. “But CBS CEO Les Moonves, who has offered to run the combined company, wants CBS Chief Operating Officer Joseph Ianniello as No. 2, the sources added.”