CBS has submitted a bid for Viacom that is below market value, sources familiar with the situation said.
The CBS special committee wants CBS CEO Les Moonves and Joe Ianniello, the chief operating officer of CBS, to lead the company, the sources said.
Viacom's class B shares closed Tuesday down 3.7 percent to $29.42, giving the company a market value of $12.18 billion. CBS shares ended Tuesday up 4.2 percent to $52.86.
Whether a deal between the two occurs doesn't necessarily hinge on price, but rather the composition of the management team, the sources said. CNBC reported earlier Tuesday that the two sides had hit a roadblock over who would be the second in command behind Moonves in a battle between Ianniello and Bob Bakish, the CEO of Viacom.
Moonves wants to pick his own management team and favors Ianniello, the sources said. Meanwhile, Viacom and CBS controlling shareholder Shari Redstone favors Bakish, the sources told CNBC.
Moonves is to remain at the combined company for at least two years, sources confirmed to CNBC on Monday.
Shares of Nickelodeon and MTV owner Viacom are down 5 percent this year and 35 percent over the last 12 months even as dealmaking picks up in the media space with Disney and Comcast jockeying for Twenty-First Century Fox assets. In December, Disney and Fox announced a deal worth $52.4 billion involving key Fox assets such as the movie studios and cable networks.