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Shares of Viacom Inc. jumped Thursday on a report that CBS Corp.’s board is preparing for merger talks with the media company.

Talks between the two companies are expected to start in mid-June, CNBC reported on Thursday, citing sources. The companies have not yet held discussions, sources familiar with the two companies said. Both CBS and Viacom declined to comment.

Shares of Viacom were up 5.1 per cent in late-afternoon trading, while CBS was up about 2.9 per cent.

The CBS board met on Wednesday to review strategic options that include an unofficial offer it made to buy Lions Gates’ Starz cable network for US$5-billion, one source briefed on the meeting said.

As a condition of the September, 2018, settlement that led to CBS dropping a lawsuit against its controlling shareholder, Shari Redstone and her family’s National Amusement Inc., Ms. Redstone agreed not to raise the possibility of a merger between CBS and Viacom Inc., which she also controls, for about two years. But it left open the possibility of independent members of the CBS board proposing a combination.

Sources close the companies have said CBS’s independent board of directors is reviewing a variety of options to protect itself against potential shareholder lawsuits that will likely come regardless of the outcome.

The widely anticipated third attempt to recombine CBS and Viacom is the latest in waves of media mergers to gird against competition for customers from digital rivals Netflix Inc., Inc and Apple Inc.

While big media companies such as Walt Disney Co., which purchased 21st Century Fox’s entertainment assets, and AT&T Inc., which bought Time Warner, are tapping their extensive film and TV libraries to launch subscription streaming services, smaller players CBS and sister company Viacom have built advertising-supported and subscription video services while also providing original content to other distributors.

It was reported earlier in May that Lions Gates Entertainment offered to sell cable channel Starz to CBS for US$5.5-billion after rebuffing CBS’ lower offer.

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