The drama at CBS (CBS 54.92, -1.14, -2.03%) reached a crescendo this morning when
the company announced the departure of CEO and Chairman Les Moonves.
It seemed like just a matter of time before Les Moonves was removed from the company after sexual harassment allegations first surfaced over the summer. His career with CBS spanned more than two decades.
Current Chief Operating Officer Joseph Ianniello will serve as
President and Acting CEO while the Board conducts a search for a permanent
successor. Mr. Ianniello, who joined the company in 2005, has been COO of CBS
since June 2013. The Chairman position will remain open pending the appointment
of a permanent CEO.
Moonves and CBS will donate $20 mln to one or more organizations that extend support to the #MeToo movement and promote equality for women in the workplace. The donation, which will be made immediately, has been deducted from any severance benefits that may be due Moonves following the Board's ongoing independent investigation led by Covington & Burling and Debevoise & Plimpton. At this time, Moonves will not receive any severance benefits; any payments to be made in the future will depend upon the results of the independent investigation and subsequent Board evaluation.
In keeping with CBS' and controlling shareholder National Amusements' commitment to Board independence, five current independent directors and one National Amusements-affiliated director have stepped down from the Board, and six new independent directors have been elected to the Board. The ongoing members of the Nominating and Governance Committee have endorsed the new independent directors. The new Board will be comprised of 11 independent directors and 2 National Amusements-affiliated directors.
In addition, National Amusements confirmed that it has no plans to propose a merger of CBS and Viacom (VIAB) and has agreed that it will make no such proposal for at least two years following the date of the settlement. National Amusements reaffirmed that it will give good faith consideration to any business combination transaction or other strategic alternative that the independent directors believe are in the best interests of the company and its stockholders.
This news removes some uncertainty from CBS, which has done quite well in recent years, in contrast to Viacom, where a turnaround is in the early stages.
CBS has a $21 bln market value and trades at 9x EV/EBITDA while Viacom has a $12 bln market value and trades at 7x EV/EBITDA.
M&A speculation will likely continue as the media space undergoes consolidation in the face of a changing landscape.