In Wake of Merger Call Off, Viacom Looks Attractive

Sumner and Shari Redstone issued a statement on Dec. 12 asking

According to media reports, Shari Redstone has been impressed by acting CEO Bob Bakish and his strategic plan for Viacom. Like many investors, the Redstones, who own 40% of both firms, view many of the assets at Viacom as undervalued and are tired of waiting for the firm to find a method of reversing this long-term decline in value. While slimming down its channel lineup may help in the short run, we believe that Viacom needs to ramp up its investment in TV and film production units to better compete in the rapidly evolving media space.

For CBS, the merger dissolution removes some of the overhang on the stock and the firm. We expect the firm to remain focused on expanding its TV production capability, particularly in support of the over-the-top offerings at both CBS and Showtime. We believe management will continue to pursue acquisitions or investment opportunities in the digital arena, particularly in distribution.

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