Viacom Directors Hire Morgan Stanley to Help Study CBS Merger

Viacom Inc. board members studying a potential merger with CBS Corp. hired Morgan Stanley, Allen & Co. and LionTree Advisors LLC to advise them.

The directors had previously added Debevoise & Plimpton LLP as their legal adviser, according to a statement Friday. The investment banks and law firm will help the board members consider a request last month by National Amusements Inc., which controls both entertainment companies, to study a combination.

Shari Redstone, who own National Amusements with her ailing 93-year-old father Sumner Redstone, is pursuing the merger after winning a battle this year against former Viacom CEO Philippe Dauman to control the fate of Viacom. The idea now is to revive Viacom, which is struggling with ratings declines at cable networks MTV and Comedy Central, by putting the company under the experienced hand of CBS Chief Executive Officer Les Moonves.

The Viacom special committee examining a merger is composed of five newly appointed directors and one from the old Viacom board. Some longer-serving board members encouraged Shari Redstone to have a more balanced representation of old and new directors to avoid the impression she was forcing the merger on the company, according to people familiar with the matter. Shari Redstone prevailed in the current composition of the special committee, which includes Thomas May, Nicole Seligman, Kenneth Lerer, Judith McHale, Ronald Nelson and Charles Phillips.

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