War Between CBS and Redstone Goes Nuclear

The ongoing power struggle between

We believe that a reunion of Viacom and CBS is unlikely to occur in the near term due to the current public spat between Redstone and Moonves and the unanimous rejection of the merger by the special committee at CBS. We think that these events would make it difficult for National Amusements and Redstone to convincingly argue that a merger of the two firms would be in the best fiduciary interests of CBS shareholders. While Redstone and National Amusements could stack the board with more amenable members, we believe that the controlling shareholder would have to wait until the annual meeting in 2019 to do so. We are maintaining our narrow moat ratings for both firms and our fair value estimates of $71 for CBS and $35 for Viacom.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.