Money from a potential sale of CBS’ New York City headquarters may be used to repurchase shares, ViacomCBS CEO Bob Bakish told CNBC on Monday.
In an interview with CNBC’s David Faber, Bakish declined to estimate what ViacomCBS believed the 38-story modernist granite building known as Block Rock was worth.
“We have some ideas. I don’t want to put it out there but it’s very material,” said Bakish, who had earlier announced sale plans at an investor conference. “We believe we can … take that cash, flow it through our waterfall of how we use cash, including potentially using it for buyback.”
Prior to their merger closing last week, both CBS and Viacom had suspended their buyback programs, Bakish said. But a roughly $2.5 billion buyback program for which CBS had been granted previous authorization will be restarted, he said.
The decision to sell the CBS building, located at 52nd Street and Sixth Avenue in New York City, is part of a larger plan to create more shareholder value, Bakish said.
ViacomCBS, he pointed out, has one of the lowest price-to-earnings multiples in the S&P 500, a “clear discount versus intrinsic value, versus our peer groups.”
“And there is no question we’re going to go and unlock that value as we move forward operating,” he said.
In the long-term that includes value around content offerings and its streaming services, said Bakish, who reiterated his belief that ViacomCBS will use a combination of free and paid platforms to differentiate itself among video-streaming competitors.
But in near-term, Bakish said the plan is to offload the company’s non-core assets, though most “are clearly core.”
When considering the Black Rock building, Bakish asked rhetorically, “Do you really need to own that? The answer is no.”
“That is a very valuable asset in terms of an iconic office building so we made the decision that we’re better off divesting it,” said Bakish, who noted that decision is part of a larger review of the company’s real-estate assets.
The finalized merger reunited Viacom with broadcast network CBS after the two companies split nearly 14 years ago.
In 2000, shortly after Viacom acquired CBS, a sale of the Black Rock building was explored. At the time, it was believed to be worth up to $370 million, according to the New York Times.
