M&A has been the key theme for media and internet stocks in 2016. In a new note, BMO analyst Daniel Salmon gives his take on the potential deals running through the rumor mill.

According to Salmon, a potential merger between Viacom, Inc. VIAB 0.05% and CBS Corporation CBS 0.64% could make the most meaningful impact on the media space.

“We believe the key positives for Viacom from a merger would be: 1) improved leverage with MVPDs; 2) CBS/Les Moonves’ track record of programming success; 3) better cross-selling of advertising; and 4) a stronger capital structure than Viacom stand-alone,” Salmon explained.

He added that ailing Paramount is the most compelling aspect of a merger for CBS.

Despite reports that buyers are no longer interested in Twitter Inc TWTR 4.27%, Salmon believes Twitter will continue to draw attention from suitors. However, until user growth and ad product performance show signs of improvement, the stock will likely continue to be too expensive for potential buyers.

Salmon also mentioned the following M&A rumors and deals:

• Pandora Media Inc P 4.84% — BMO expects Pandora will want to hold off on a deal until it gets more clarity on its current product initiatives.
• Netflix, Inc. NFLX 0.64% — BMO sees Apple Inc. AAPL 0.51% as the most likely buyer, but believes the chances of a deal are slim.
• MDC Partners Inc MDCA 1.54% — BMO believes…

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