Viacom, Class B( VIAB ) - The New Viacom Message Board

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Technology Stocks : Viacom, Class B( VIAB ) - The New Viacom

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To: MGV who wrote ()	5/5/2000 10:52:00 AM
From: MGV	of 56

More Viacom Research: VIAB: Viacom/CBS Merger Transaction Expected to Close Today --SUMMARY:--Viacom Inc.--Entertainment The Viacom/CBS merger is expected to come to fruition today. We view the merger as a homerun transaction, which should create an immediate advertising juggernaut, second only to the pending AOL/Time Warner merger. As expected, the FCC ruled that the company would have to divest some of its TV stations within the next year. We remain optimistic that the FCC will reconsider its 35% coverage rule and the new Viacom may still be able to hold on to these assets.If not,the company will likely make the appropriate adjustments, and perhaps with all of the televison station swaping that would likely begin, the company could end up with an even better footprint. With the merger, CBS/Viacom will own two broadcast networks, which is in violation of current FCC regulations. P/E Ratio 12/00.....:77.7x Target Price..:$75.00 Prior:No Change P/E Ratio 12/01.....:57.8x Proj.5yr EPS Grth...:18.0% Return on Eqty 99...:N/A% Book Value/Shr(00)..:15.81 LT Debt-to-Capital(a)44.7% Dividend............:$N/A Revenue (00)........:14813.00mil Yield...............:N/A% Shares Outstanding..:711.0mil OPINION----------------------------------------------------- (con't) We anticipate that this too will be revisited over the course of the next six months, potentially allowing Viacom to keep both networks. We view these two sidebar issues as rather small in the context of the overall transaction. *We target the stock to the $70s, based on a 23x EV/EBITDA multiple on our 2001 cash flow estimate of $5.1 billion (pro forma for the CBS merger). Copyright - Salomon Smith Barney, Inc. 2000

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