(Adds background, details from letter)
Sept 29 Sumner Redstone's National Amusements,
the majority shareholder of CBS Corp and Viacom Inc
, said a merger of the two would offer substantial
savings and that it would not support the acquisition of either
company by a third party.
Privately held National Amusements, which owns 80 percent of
the voting shares of both media companies, also said it would
not support a transaction that would cause it to surrender
control of either company or a combined entity.
CBS and Viacom first separated 10 years ago.
"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," said the
letter signed by Redstone and his daughter Shari Redstone.
The optimal deal structure would be an all-stock transaction
in which holders of each company would receive shares in the
combined entity of the same class as they currently hold,
National Amusements said in a letter to the companies' boards.
Any transaction would require the approval of both boards.
Sumner Redstone, Shari Redstone and David Andelman will not vote
as directors on the deal and will not participate in
deliberations, according to the letter.
Reuters reported on Wednesday that National Amusements,
owned by Sumner and Shari Redstone, could contact CBS and Viacom
as soon as this week to ask them to form independent board
committees to discuss a potential merger.
(Reporting by Anya George Tharakan in Bengaluru and Anna Driver
in New York; Editing by Ted Kerr and Lisa Von Ahn)