NEW YORK -- Frustrated with a languishing stock price, media conglomerate Viacom Inc. said late yesterday it is considering a plan to split into two companies to allow investors to value its businesses separately.
A breakup of the New York-based media company, whose properties include CBS, MTV, VH1, and the Paramount movie studio, would also solve the question of who would succeed Sumner Redstone as chief executive.
Confirming a report on The Wall Street Journal's website, Viacom said late yesterday it was exploring a plan that would split it in two. One company anchored by its fast-growing cable networks such as MTV, led by longtime MTV chief Tom Freston; and another built around the broadcast television businesses that would be run by CBS head Les Moonves.
Freston and Moonves have been contending for the top job at Viacom since last June, when chief operating officer Mel Karmazin left in a power struggle and triggered the two-way race.
Under the breakup plan being considered, the broadcast television company would also include Viacom's radio businesses, which remain profitable but have fallen out of favor with investors due to poor growth prospects and increasing competition from portable music players like Apple Computer's iPods.
Viacom's stock has been languishing below $40 since April 2004 as investors remained frustrated that the high-growth businesses like MTV remained tied to slower-growth properties like radio, outdoor advertising, and theme parks.
In after-hours trading the shares gained $1.41 to $38.41.