EmailThe 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.
