Time Warner-CBS Seen Candidate for Blockbuster Merger: Real M&A

Time Warner Inc. and CBS Corp. have flirted for years. A marriage now may make more sense than ever.

CBS shares, while trading near the highest price since the company and Viacom Inc. split seven years ago, fetch the lowest valuation versus earnings when compared with its five largest U.S. peers, according to data compiled by Bloomberg. Gabelli & Co. said buying the most-watched broadcast network would give Time Warner, owner of cable channels such as CNN and TNT, more negotiating leverage to win higher fees from pay-television systems that carry its programming.