CBS has submitted a bid to merge with Viacom, its former sister company, that is below market value, sources tell CNBC. Reuters reported Monday that a lower bid was to be expected.
Why it matters: The move shows that CBS clearly feels its position in the market is more valuable than Viacom's, as Reuters noted Monday when it first broke the news.
There has been reported drama over who would take the #2 spot in the company next to CBS’ current CEO Les Moonves. Some, including controlling shareholder Shari Redstone, reportedly want Viacom CEO Bob Bakish to take the spot. CBS' special committee looking into the merger reportedly wants Moonves and Joe Ianniello, the chief operating officer of CBS, to lead the company, the sources said.
The potential merger comes at a time of rapid consolidation within the industry. Legacy media companies are looking to take on tech giants, like Amazon and Netflix, that are investing in their own entertainment, sports and news content.
Viacom shares were down at market close Tuesday. CBS shares were up.