Over Lunch, at the Bar And Over the Cubicle Wall

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Infinity, as it turns out, doesn’t go on forever.
But CBS just might, if CBS Corp. Chairman Les Moonves has his way. Infinity, the country’s second-largest radio group, has re-branded itself as CBS Radio in preparation for parent company Viacom’s split, scheduled to go live in little over two weeks.

The name is already changed online, where virtually all references to Infinity have disappeared. CBS bought Infinity Broadcasting in 1996 and the radio division became known as CBS Radio. In 1998, CBS’s radio assets were spun off as a public company and re-christened Infinity Broadcasting. Then, in November 2000 Infinity was reacquired by Viacom, following Viacom’s merger with CBS, a pairing that will be undone Dec. 31.

When Viacom splits in 15 days, it will become two companies: Steadily-growing, dividend-issuing CBS Corp. includes the TV networks, station group and production studio, radio group, outdoor advertising business, Showtime, publishing assets and theme parks; the fast-growing Viacom includes the ad-supported cable networks, the movie studios and the music divisions.

Before the merger even takes place, however, both sides have embarked on a buying spree in an effort to impress investors: CBS acquired cable net College Sports TV, and Viacom has acquired DreamWorks SKG, iFilm and Gametrailers.com.

So far, with the stocks trading on an as-issued basis, investors appear to prefer the new Viacom, which closed last week at $43.65. CBS finished last week at $25.63. But Barron’s noted that could create opportunity for patient investors who remain with a relatively under-valued CBS. Last week Merrill Lynch analyst Jessica Reif Cohen valued the sum of CBS’s parts at $32.50.

Moonves, who will be CEO of the post-split CBS business, issued a letter to employees last week regarding the stocks as-issued trading. In the letter, which was filed with the SEC, he noted “the relative prices of these two new companies appear to reflect the view of New Viacom trading as a quicker growth stock, and CBS Corporation being valued as a stable, dividend-paying company positioned for steady growth in the future.”

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