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CBS And Viacom Reportedly Reignite Merger Talks

CBS (CBS-A,CBS) and Viacom are gearing up to resume merger talks — and settle once and for all who will be chief executive officer of the combined company, the New York Post reported.

On Monday, the two media giants cleared a major hurdle to getting back to the negotiating table when Viacom settled a contract dispute with AT&T (T), that had $1 billion in carriage fees hanging in the balance.

The planned settlement averted a blackout of Viacom channels, including MTV and Comedy Central, on AT&T platforms — paving the way for CBS's CBS, +3.93% independent directors to tell the rest of the board that they are ready to take another crack at joining forces with Viacom, the report said

CBS's independent directors are expected to approach the board in the next few weeks, assuming no unexpected snags get in the way. CBS's board will then approach Viacom with an offer, the report said

CBS is expected to ask Viacom to fork over a premium in the merger, which will be done by a share swap, because Viacom's shares have fallen 15% in the last 12 months, compared with an 11% drop at CBS.

In addition to a agreeing on a price, the two companies need to hammer out a new leadership plan, which should be easier with former CBS CEO Les Moonves out of the way, the report noted.
In the running for the top job is Viacom CEO Robert Bakish and CBS interim CEO Joe Ianniello, although Bakish is the current front-runner, sources said. He is a favorite of Shari Redstone, whose National Amusements Inc. controls both companies.

Working against Bakish was his promise when he took over Viacom in 2016 to focus on six "flagship" networks. He has fallen a bit short on that promise, the report said.

Ianniello faces even greater obstacles in the text messages that emerged between him and Moonves before the latter was ousted in a flood of sexual-misconduct allegations.

The texts, sent through a service called Tigertexts, revealed Ianniello had been supporting Moonves's battle to dilute Redstone's voting control over the media company.

One source said CBS's board has been interviewing outside candidates for Ianniello's job as recently as this month, including former Turner CEO John Martin, who has also interviewed with Redstone.

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