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CBS Plans to Make All-Stock Bid for Viacom Below Current Market Value (Report)

Sources say initial offer will be submitted in the next few days

CBS is planning to make an all-stock offer for Viacom below its current market value, in its attempt to merge with the media company, Reuters reported Tuesday.

Sources familiar with the plans told the outlet that tough negotiations are anticipated going forward in the acquisition. These individuals say the initial offer — which is to be submitted in the next few days — will include CBS boss Leslie Moonves’ proposal to continue to run the show for at least two years if the merger goes through.

The sources — who asked to remain unidentified — noted the offer relies on Viacom accepting all other points in CBS’ bid for the company helmed by CEO Bob Bakish.

CBS and Viacom denied TheWrap‘s request for comment Monday.

A move like this is uncommon, as deal negotiations don’t typically begin with the company that is looking to merge valuing its proposed acquisition at a discount. This could indicate that CBS views itself above Viacom in the U.S. media biz.

After trading hours Monday, Viacom’s shares were valued at $29.62 (down 3 percent), while CBS’ stock saw little change. The market capitalizations of CBS and Viacom are $19.4 billion and $12.7 billion, respectively.

In February, the two companies set up specialized committees to discuss the merger, which would bring together the two entities that were split by media mogul Sumner Redstone over a decade ago. The Redstone family began merger talks in 2016, which ended unsuccessfully thanks to CBS’ concerns over pricing and governance.

Since then, some analysts have seen Bakish’s attempts to boost the company’s performance as a sign CBS will acquire Viacom at a premium.