TheStreet

CBS Corp. (CBS - Get Report) shares jumped higher Monday amid reports the network is close to an all-stock merger deal Vicaom (VIAB - Get Report) , a move that would end years of speculation of a tie-up between the most-watched U.S. broadcaster and the owner of Paramount studios.

Bloomberg reported Sunday that talks between the two media groups, centering around National Amusements Inc's Shari Redstone -- who control both companies -- could conclude as early as today, with a deal similar to last year's proposal likely to emerge. Redstone would chair the combined group, Bloomberg reported, with Viacom CEO Bob Bakish taking on the expanded role of CEO for both media companies. 

Earlier this spring, The Wall Street Journal said CBS held preliminary talks with Viacom, which was split from the broadcaster by Sumner Redstone in 2005, with an aim to merger to two groups in order to allow for better leverage in negotiations with advertisers in a media landscape that values scale over content.

CBS shares were marked 2% higher in early Monday trading and changing hands at  $49.90 each in a move that extends the stock's year-to-date gain to just over 14%.

Viacom, meanwhile, slipped 1.9% to $29.45 in pre-market trading after Reuters reported that shareholders would receive 0.595 CBS shares in the merger agreement.

Viacom shares have risen 16.77% so far this year and posted stronger-than-expected second quarter earnings Thursday as profits from its Paramount studios grew for the 10th consecutive period thanks to successful releases such as Rocketman and Pet Sematary.

Last year's ouster of longtime executive and CBS CEO Les Moonves, who resigned after more than two decades with the broadcaster amid multiple allegations of sexual harassment and inappropriate conduct, was considered a key driver for a renewed Viacom tie-up.

As part of the overall agreement to oust Moonves, National Amusements said it would delay any push to merge the two groups for at least two years, although other entities or investors were free to do the same.

CBS beat Wall Street's second-quarter earnings expectations last week as advertising revenue grew 7%, led by the company's broadcast of the national semifinals and championship game of the NCAA Division I Men's Basketball Tournament.

Content licensing and distribution revenue rose 12%, mainly as a result of higher domestic licensing sales. Affiliate and subscription fee revenue rose 13%. 

Viacom said adjusted earnings for the three months ending in June came in at $1.20 per share, down 7% from the same period last year but firmly ahead of the Street consensus forecast of $1.07 per share. Group revenues, Viacom said, rose 3.7% to $3.357 billion, again topping analysts's estimates of a $3.33 billion tally.