Viacom, CBS End Merger Investigation at National Amusements' Urging

Viacom and CBS have ended their mutuals look into merging after majority shareholder National Amusements said "this is not the right time" for the two to combine. Viacom also said Monday in a news release its board dissolved its special committee formed to look at a possible transaction and instead made acting President-CEO Bob Bakish permanent and appointed him to the board. Shari Redstone, board vice chairwoman and president of National Amusements, said she's "very excited by the strategy Viacom is pursuing under Bob's leadership. While there is much work to do, I firmly believe that Viacom has a bright future and that confidence is underpinned by senior management's commitment to innovation and a more coordinated, global approach to managing our brands." CBS told us Monday it had ended looking into a possible transaction. Redstone and National Amusements CEO Sumner Redstone signed a letter Monday from National Amusements, which also is majority shareholder of CBS, to the two companies' boards, suggesting they end exploration of a deal -- something it had pushed in September (see 1609290077). National Amusements said it changed its mind about the progress and prospects of the two after months of "careful assessment and meetings with the leadership of both companies." CBS/Viacom was seen by some as not facing big regulatory hurdles (see 1610050039). In a note to investors Monday, Wells Fargo analyst Marci Ryvicker said the National Amusements change was unsurprising since the longer the evaluation took, the less likely it became a combination would happen. CBS CEO Les Moonves' comments at recent investor conferences also suggested CBS was better as a stand-alone operation, she said, saying Wall Street "has warmed up to Mr. Bakish in his new role." Viacom shares closed 7.5 percent lower Monday at $39.25.