CBS Set to Hire Goldman, JPM as It Explores Viacom Merger

  • CBS management hires separate banks from special committee
  • Viacom management not hiring a bank as leadership is in flux

CBS Corp. is close to hiring Goldman Sachs Group Inc. and JPMorgan Chase & Co. to advise Chief Executive Officer Les Moonves and the management team as it explores a potential merger with Viacom Inc., people with knowledge of the matter said.

While an official retention letter hasn’t been signed, according to one of the people, the banks have begun talks with executives about a possible transaction. CBS may hire other banks as well, said the people, who asked not to be identified because the information is private.

CBS management’s decision to hire banks is separate from the special board committee’s hiring of Lazard Ltd., the people said. The special committee is made up of independent directors.

The special committee of Viacom’s board hired Morgan Stanley, Allen & Co. and LionTree Advisors LLC to advise the directors on a possible CBS merger, according to a statement earlier Friday. Viacom’s management team won’t hire a bank at the moment, according to the people familiar with the matter, because the company’s leadership is in flux.

Representatives of CBS, Goldman Sachs, JPMorgan and Viacom declined to comment.

Viacom Flux

Tom Dooley, who’s serving as interim chief executive of Viacom, is leaving the company in mid-November. Former CEO Philippe Dauman departed in August after a months-long legal battle with Shari Redstone, whose 93-year-old father Sumner Redstone owns National Amusements, the controlling shareholder of both CBS and Viacom.

Viacom would give CBS additional scale in negotiations with pay-TV providers. Still, its revenue and profit are falling as networks have seen declines in ratings, affiliate fee growth, and advertising dollars.

While Moonves has the support of Shari and Sumner Redstone to run a combined CBS-Viacom,
they have said publicly that they won’t support a deal that requires them to give up control of either business. They aren’t willing to offer him a stake or voting control of their family’s holding company, people familiar with the matter said Friday.

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