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Viacom Rejects CBS’ Initial Acquisition Offer

First proposal to re-merge priced Paramount Pictures parent below market value

Viacom has rejected CBS’ first offer to acquire the Paramount Pictures, Nickelodeon and Comedy Central parent company, a person close to Viacom told TheWrap.

The rejection comes as no surprise as the initial proposal valued Viacom below its market cap. A counter-offer from Viacom, valuing the smaller of the two publicly traded corporations at a high price tag, is expected to be presented to CBS soon.

A second source tells us that Viacom “expressed displeasure” with the valuation weeks ago during discussions between the two companies.

Tuesday’s all-stock pitch was contingent on CBS’ management team leading the mega-company. CBS wants CEO Les Moonves and president Joe Ianniello to run the combined corporation. It’s unclear where that would leave Viacom boss Bob Bakish.

Since the starting-point offer called for an all-stock deal, the exact dollar value assigned to Viacom has fluctuated since talks began, and could continue to shift.

After a tough day of stock trading yesterday, Viacom’s current market cap was $12.222 billion, based on a VIAB per-share price of $29.42, which is where the U.S. markets closed at 4 p.m. ET Tuesday. That was down $1.13 per share from Monday’s close, or minus 3.70 percent.

VIAB shares have recovered a bit thus far today. CBS is also trading up a couple of coins per share.

CBS and Viacom were one company once before, though they spun off from one-another back in 2005. Since then, CBS has been the more successful of the two publicly traded corporations.

Both companies are controlled by the Redstone Family. The ailing Sumner Redstone’s holding company National Amusements Inc. carries about 80 percent of the voting shares for both CBS and Viacom, and his daughter Shari Redstone is a vice chairman for each. She’s been leading the charge for CBS and Viacom to recombine.

Reps for both Viacom and CBS declined comment to TheWrap on this story.