SMH Capital issued a research report calling CBS Corp. shares a bargain, and reiterated its buy rating on the former Viacom unit. Nothing spectacular, but nestled inside the report's risk analysis is a mention of dealmaking.
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SMH notes that since Viacom spun off CBS, it lacks a strong stable of cable networks to negotiate favorable terms from cable providers, unlike peers ABC Inc., Fox Broadcasting Co. and NBC Television Network. The report notes that the purchase of CSTV partially addresses the issue. However, aside from CSTV, the only other cable network CBS can offer cablers is Showtime, which trails in ratings against rival premium cable network HBO. While the report doesn't explicitly suggest CBS is on the prowl, it's easy to infer that CEO Les Moonves may be looking for a bargain. In the past, CBS reportedly showed interest in buying CNN should Time Warner Inc. decide to unload it. Additionally, when rumors surfaced last year about Discovery Networks being shopped around, CBS appeared on the short list of buyers. - Matthew Wurtzel
See research report from SMH Capital (pdf)
See CNN rumors from The Deal newsweekly's Backstory column
See Discovery rumors from Dealscape
See CBS spinoff story from TheDeal.com
See CSTV story from TheDeal.com
