The best outcome for CBS and Viacom would be other suitors for the companies, analyst Barton Crockett told CNBC on Thursday.
CBS and Viacom have not been able to come to terms on some aspects of their merger and CBS is fighting what it calls interference by the Redstone family.
“They can get a lot more value from other players than this kind of forced marriage that’s being contemplated here,” said Crockett, senior analyst at B. Riley FBR.
Shares of CBS plunged Thursday after a judge said National Amusements, controlled by the Redstone family, can challenge CBS’ voting control plan.
CBS wants to cut National Amusement’s voting power through a special dividend to shareholders. Its board scheduled a meeting to consider the dividend for later Thursday and confirmed that meeting would take place as planned despite the ruling.
Crockett believes CBS is doing everything it can to protect the interests of its shareholders that don’t have a majority of the vote.
There is also a lot of interest among internet companies to get deeper into content, he added.
“If AT&T and Time Warner beat off the DOJ’s antitrust suit there’s going to be a lot more, I think, reasons to think about marriages of internet platforms with content and being able to use that combination to innovate in advertising and get scale with consumer data,” said Crockett.
Meanwhile, he thinks CBS shares will eventually recover no matter how the merger issue is resolved.
“It’s a good company in a troubled sector,” he said. “At some point in the future we’re going to have less uncertainty than we have today.”
He has a buy rating and $60 price target on the stock.
— CNBC’s Liz Moyer contributed to this report.