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Shari Redstone Defends Keeping Viacom, CBS Corp. Separate

Shari Redstone, vice chair of CBS Corp. and Viacom, defended her decision last year not to merge the companies at a keynote Q&A Wednesday at the Code Conference in Rancho Palos Verdes, Calif.

She cited the potential still to be unlocked at Viacom now that its been rejuvenated by management led by CEO Bob Bakish.

“What became apparent to me very quickly was that our assets were really undervalued, which I understood, but what I didn’t understand at the time was the significant upside that existed at their business when we had good management in place and the culture came back,” she said.

Redstone had encouraged the companies to examine the possibility of a merger in 2016, a path many industry observers thought was wisest in an era when scale is becoming more important than ever to competing with tech giants like Facebook and Google.

But she was persuaded to keep Viacom separate once she was able to assess the upside still in place there despite years of struggles under prior management that had left the conglomerate in a state of distress. She did credit CBS Corp. CEO Leslie Moonves with providing an attractive option should she had opted for a merger.

“I haev a great relationship with Les,” she said. “I think we could have worked together on a combined company. But at that point in time, we looked at the valuations, and we were undervalued.”

Getting Viacom’s assorted cable brands, including MTV, Nickelodeon and Comedy Central, to create must-see content will be key to reviving those networks, which she noted will likely appear in an entertainment-only skinny bundle offering Bakish hinted at earlier this month. But the company is also going to be focused on producing content just for mobile platforms.

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