The note from Sumner and Shari Redstone, who control National Amusements, says a recombination of the companies that were separated a decade ago would enable them to “respond even more aggressively and effectively to the challenges of the changing entertainment and media landscape.”
National Amusements owns 80% of the voting shares at both companies. But the Redstones said that they and ally David Andelman won’t vote on the matter at the Viacom and CBS boards, a way to help protect the interests of independent shareholders.
Still, the exhibition chain says it would reject a third party offer to buy either company, or a proposal that would take away the Redstones’ control.
They offer a “tentative view” that an “optimal structure would be an all-stock transaction in which the stockholders of each company would receive shares in the combined company of the same class as they currently hold.”
Viacom confirmed that it received the letter and says it “expects that the Viacom board of directors will form a special committee of independent directors to carefully consider the request from National Amusements and any proposed transaction.”
Here’s the full letter:
Members of the Boards:
We believe that a combination of CBS and Viacom might offer substantial synergies that would allow the combined company to respond even more aggressively and effectively to the challenges of the changing entertainment and media landscape.
As a result, we would like both companies’ boards to consider a potential combination of the companies. Our tentative view is that the optimal structure would be an all-stock transaction in which the stockholders of each company would receive shares in the combined company of the same class as they currently hold.
We therefore request the board of each company take the appropriate steps to consider the proposed transaction. We believe that any transaction should be the result of full and fair deliberation and negotiation, and that any transaction would proceed only if it is approved by each board. None of Sumner M. Redstone, Shari E. Redstone or David R. Andelman will vote as directors on the consideration of this matter by either company’s board, and none will participate in any of the related deliberations.
To avoid any doubt, National Amusements is not willing to accept or support (i) any acquisition by a third party of either company or (ii) any transaction that would result in National Amusements surrendering its controlling position in either company or not controlling the combined company. We believe moving forward expeditiously, but with due care, is important and we are prepared to be of assistance to the two companies as they explore this possibility.
NATIONAL AMUSEMENTS, INC.