National Amusements, a holding firm with majority stakes in both Viacom, Inc. and CBS Corporation, says that now “is not the right time to merge the companies.” This likely works just fine for both companies, neither of which have been wanting the merger.
Reports from insiders claim that the merger talks never went beyond preliminary stages. There were problems coming to an agreement on a deal and CBS Corporation was worried about weak assets belonging to ViaCom, Inc. VIA also wanted to avoid a merger in an effort to prove it can recover on its own.
CBS Corporation’s performance has been strong lately with good reception to its Showtime channels and other services. ViaCom, Inc. has been facing troubles with a lack of interest in its networks and poor box office performances, reports The Wall Street Journal.
“Following the management changes that the Viacom Board put in place, we have been very impressed with the forward-looking thinking and strategic plan being pursued under Bob Bakish’s leadership,” National Amusements said in a letter obtained by Reuters.
While it appears that a merger between Viacom, Inc. and CBS Corporation isn’t happening, this may not be the case. One unnamed source claims that this new direction doesn’t mean that a possible merger has been completely ruled out.
VIA stock was down 6%, VIAB stock was down 7% and CBS stock was up 1% as of Noon Monday.