Viacom Inc. has asked CBS Corp. to raise its bid by about $2.8 billion, which would value the New York media company at $14.7 billion, according to two people familiar with the matter who were not authorized to speak publicly.
CBS is likely to reject the request.
The Viacom offer recommends an exchange ratio of 0.68 CBS shares for each share of Viacom class B stock. CBS had offered 0.55 of its shares for each Viacom class B share, according to the knowledgeable people _ an amount lower than Viacom's current stock price.
"Given a Viacom counteroffer that appears to suggest a 15 percent to 18 percent premium above its recent trading range ... the parties seem reasonably at odds on valuation, not unexpectedly," Tuna N. Amobi, media analyst with CFRA Research, wrote in a Monday note to investors.
CBS has argued that Viacom's stock already has a built-in premium because Viacom shares rose in late January when news of the possible acquisition emerged. In addition, the proposed deal has weighed on CBS stock as investors worry that swallowing Viacom's assets could become a drag on CBS.
In a letter to CBS board members last week, Viacom asked that Viacom CEO Bob Bakish become the second-in-command at the proposed combined company, behind CBS CEO Leslie Moonves.
Shari Redstone, whose family controls both companies, has led the drive for an acquisition and has made it clear that she wants Bakish in the heir-apparent role.
The Redstone family controls nearly 80 percent of the voting shares of CBS and Viacom through their Massachusetts-based investment vehicle, National Amusements Inc.
Viacom and CBS declined to comment.
The combined company would include CBS' assets, including the popular broadcast network, television stations and Showtime premium channel. Viacom owns MTV, VH1, Nickelodeon, BET and the Hollywood movie studio Paramount Pictures.
Price and management structure appear to be the main obstacles to reunite the companies that split off in 2006 when billionaire patriarch Sumner Redstone _ now 94 and ailing _ decided he could create more wealth by dividing his empire into two companies.
Shari Redstone tried to recombine the two companies a decade later, but that effort collapsed in late 2016 because of CBS' reluctance to swallow the more challenged Viacom. She then installed Bakish, who previously ran Viacom's international operations, in Viacom's top role.
CBS wants to keep its management team intact, with Moonves and CBS Chief Operating Officer Joseph Ianniello continuing in their current roles. Under the Viacom plan, Ianniello's role is unclear.
