Viacom Rejects CBS, Works On Counterproposal

Viacom has rejected CBS' proposal -- which valued Viacom below its market value -- to acquire the company, and Viacom is now working on a counterproposal, according to reports.

Viacom class B stock closed up 3.9% on Wednesday to $30.57. It is down 8% since Monday's opening. CBS delivered its merger proposal to Viacom on Friday. Viacom's market capitalization is now $12.2 billion.

On Wednesday, CBS stock closed 1.8% higher to $53.79.

CNBC says CBS' offer would give a bit more -- about half of a CBS share (0.55 a share) -- for each full Viacom class B share. For its part, reports say Viacom wants at least 0.62 of a CBS share; Viacom argues that potential cost synergies of more than $1 billion should reflect a premium deal price.

CBS' merger plan is to have Les Moonves, chairman/CEO of CBS Corp., running the company -- with Joseph Ianniello, chief operating officer of CBS Corp., as the new number two of the newly combined company.



Viacom is now working on a counterproposal, according to Reuters.

National Amusements, which has a controlling interest in both companies, wants Robert Bakish, chief executive officer of Viacom to be the second highest ranked executive in the new company.

Shari Redstone, president of National Amusements and vice-chair of both CBS and Viacom, has pushed for the two companies to merge.

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