Shari Redstone is no longer supporting her proposed merger of CBS Corp. (NYSE:CBS) and Viacom, Inc. (NASDAQ:VIAB), signaling that remaining independent is good for both companies. Redstone family’s holding company National Amusements, which controls both companies, withdrew the proposal on Monday by sending a letter to both company’s boards.
“We know Viacom has tremendous assets that are currently undervalued, and we are confident that with this new strong management team, the value of these assets can be unleashed,” Redstone and her father Sumner Redstone said in the letter. “At the same time, CBS continues to perform exceptionally well under Les Moonves, and we have every reason to believe that momentum will continue on a stand-alone basis.”
Viacom shares fell as much as 7.12 percent to $35.93 in the early trading, while CBS shares rose 1.79 percent to $63.67 at 12:27 p.m. in New York. Redstone also said the Viacom interim CEO Bob Bakish will become the permanent leader of the company. Bakish took over as Viacom CEO in November and he is the third chief executive since August.
Viacom had been struggling in the recent years as more and more people turn to watch video online rather than watching live TV. Also, its movie studio Paramount Pictures reported lost in the most recent fiscal year.
Viacom and CBS split in 2006. CBS performed better under the lead of Les Moonves. Moonves were confident to keep the company independent and considered the deal as interesting but not necessary. “If it looks right, and is structured properly, it could be an attractive opportunity,’’ Moonves said in November. “If not, we are very excited about our prospects on our own.’’