S&P Global Market Intelligence analyst Tuna Amobi onSept. 29 upgraded his rating on the class B shares of to "hold" from"strong sell".
The upgrade comes after National Amusements Inc., the owner ofa majority of CBSCorp. and Viacom's voting stock, recommended a potential between the two companies.
Asking the companies' boards totake "appropriate steps" to consider a merger, the holding companyproposed an all-stock transaction in which the shareholders of each companywould receive shares in the combined company of the same class as theycurrently hold. Sumner Redstone, Shari Redstone andDavid Andelman will neither vote on the proposal, nor will they participate inany of the related discussions because of their ties with the holding company.
The analyst, who increased his price target on Viacom sharesto $39 from $32, said that while the letter alluded to "potentialsubstantial synergies," it expressly, and somewhat disappointingly, ruledout any third-party bid or loss of control. "While such reunion seems likea culmination of recent leadership/governance changes at Viacom, we see somemajor hurdles, aside from difficult fundamentals," Amobi added.