Viacom and CBS Corp. took the first step toward considering a recombination on Friday by forming special committees to evaluate the request made Thursday by their mutual parent company, Sumner Redstone’s National Amusements.
Viacom confirmed the composition of the committee in a release on Friday. CBS is understood to be in the process of setting the members of its panel.
National Amusements, which controls 80% of the voting shares in Viacom and CBS, sent a letter to the boards of both companies asking them to consider a merger.
Viacom’s committee is composed of independent directors Thomas May, who is chair of the Viacom board, and Nicole Seligman. May and Seligman will co-chair the special committee. The other members are Kenneth Lerer, Judith McHale, Ronald Nelson and Charles Phillips.
Lerer, McHale and Nelson joined the Viacom board in August amid the corporate shakeup that saw chairman-CEO Philippe Dauman step down after a legal battle with National Amusements’ Sumner Redstone and Shari Redstone. Phillips has been on the Viacom board since 2004.
CBS and Viacom were brought together by Sumner Redstone’s acquisition of the Eye in 2000. But the companies were carved up as separate entities in 2006 out of concern that the larger entity was not valued appropriately by the market.
At the time, the expectation was that Viacom’s cable assets would drive growth while CBS’ broadcast holdings would be a slow-growth stock. A decade later, CBS is a much healthier company with sizzle on Wall Street while Viacom’s core assets have weakened, hence the push to reunite the companies.
Viacom’s special committee has hired Debevoise & Plimpton as its independent legal advisor. It’s expected to also retain an independent financial advisor.