Any Viacom (VIAB) Deal Will Be in Best Interest of CBS (CBS) Shareholders - Wells Fargo

September 28, 2016 12:39 PM EDT
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Wells Fargo analyst Marci Ryvicker weighed in following reports National Amusements Inc. (NAI), the controlling shareholder of CBS (NYSE: CBS) and Viacom (NASDAQ: VIAB), is preparing to call on the two media companies to explore a merger via independent board committees.

Ryvicker views this as a reasonable thing for NAI to do and is simply requesting that the two companies EXPLORE this option - which means to them that there is no '"forcing" a combination; and that CBS/ Les Moonves clearly gets a say here.

The analyst thinks whatever decision is reached it will be in the best interest of CBS shareholders: 1) levering VIAB to purchase CBS at a premium (Les has talked about a $100/share sales price before, which would be some pretty nice upside), 2) CBS purchasing VIAB at a discount, or 3) CBS concluding that nothing can be done; therefore it will remain independent.

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