Sumner Redstone and daughter pull CBS, Viacom merger plan

Mon Dec 12, 2016 3:58pm EST
 
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By Jessica Toonkel and Greg Roumeliotis

NEW YORK (Reuters) - Media mogul Sumner Redstone and his daughter Shari called off their failed effort to merge CBS Corp CBS.N and Viacom Inc (VIAB.O: Quote) on Monday, sending shares of Viacom - widely viewed as the weaker company - down almost 8 percent.

The collapse of the plan, which never got beyond initial talks, raises questions about the future of both Redstone-controlled companies just as scale becomes more important in a media industry set to be reshaped by AT&T's (T.N: Quote) deal to buy Time Warner Inc (TWX.N: Quote).

The end of negotiations was not a complete surprise. Les Moonves, the longtime chief executive of CBS, said last week talks were still stuck in the early stages, more than two months after the Redstones asked the boards of both companies to explore a tie-up.

The two sides never entered talks on pricing and were far apart on Viacom's value, according to two sources familiar with the situation.

Shares of Viacom were down 7.9 percent at $39.10 in afternoon trading.

CBS shares initially rose 1.8 percent, touching a nearly 2-1/2 year high, after CNBC cited a New York Post report that Verizon Communications Inc (VZ.N: Quote) was interested in buying the company. Verizon declined to comment.

In afternoon trading, CBS shares were down 0.4 percent at $62.12.

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A woman exits the Viacom Inc. headquarters in New York April 30, 2013.  REUTERS/Lucas Jackson/File Photo