Shares of Viacom have run over 3% to the upside in pre-market hours on the apparently imminent announcement of the media merger. CBS shares, by contrast, remain flat.
Bloomberg reported Sunday that talks between the two media groups could conclude as early as today, with a deal similar to last year's proposal likely to emerge after some negotiation on the as of yet uncertain deal terms.
The merger would recombine the two companies after a number of years apart following the split of the company by former chairman Sumner Redstone in 2006.
National Amusements' Shari Redstone, who has long been at the center of the corporate intrigue at the companies in the wake of her father's uncertain succession and controls both companies, is expected to chair the combined group with Viacom CEO Bob Bakish taking on the expanded role of CEO for both media companies.
Last year's ouster of CBS CEO Les Moonves, who resigned after more than two decades with the broadcaster amid multiple allegations of sexual harassment and inappropriate conduct, was considered a key driver for a Redstone to renew merger talks and likely cleared the way for Bakish to assume the top role after a tie-up.
Neither Bakish nor current CBS CEO Joe Ianiello spoke to the speculation on the merger agreement in earnings calls late last week, though strong earnings results from each could impact deal pricing at the last minute.
"As you will see from the "return to growth" results [in Viacom's earnings], we think it is likely that Viacom is holding out for a better price," Jim Cramer's Action Alerts PLUS team said of Viacom's latest report. "We expect more updates on the deal in the coming days."
The deal is seen as vital to the survival of the media entities by shareholders as the specter of cord cutting drives from Disney (DIS) , Netflix (NFLX) , Amazon (AMZN) and others looms over both traditional television players.
The combination of the companies would carry a significant amount of content under one umbrella, aiding a larger streaming play than CBS' recently announced "All Access" venture that could pose a more significant challenge to the aforementioned names.
To be sure, the deal between the two companies has been discussed for years, leaving many skeptical on the status of negotiations after so many false starts.
I'm hearing Viacom and CBS could take place within this century.— Joe Flint (@JBFlint) August 9, 2019
Viacom investors will have to hope that the third time is a charm after Redstone's attempts to recombine the companies fell short of the mark in 2016 and 2018.
At the very least, reports indicate that the final negotiations could let the announcement fall into Tuesday or possibly later in the week.