(Reuters) - CBS Corp CBS.N plans to make an all-stock offer for Viacom Inc VIAB.O that values the U.S. media company below its current market valuation, people familiar with the matter said on Monday, indicating that tough negotiations lie ahead.

It is unusual for deal negotiations to start with the acquirer valuing its target at a discount. The fact that CBS’s first bid for Viacom infers such a valuation reflects how CBS views its position in the U.S. media landscape as superior to Viacom’s.

As part of its initial offer to be submitted in the next few days, CBS Chief Executive Leslie Moonves will propose to stay at the helm for at least two years if the U.S. media company’s bid to merge with peer Viacom is accepted, according to the sources.

That offer is contingent on Viacom accepting all other aspects of CBS’s bid, the sources added.

The sources asked not to be identified because the matter is confidential.

CBS and Viacom declined to comment.

Viacom’s shares were down 3 percent at around $29.62 in after-hours trading, while CBS shares were little changed. CBS and Viacom have market capitalizations of $19.4 billion and $12.7 billion, respectively.

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CBS and Viacom set up special committees to explore the merger in February, a move to reunite the companies split by controlling shareholder Sumner Redstone more than a decade ago.

The two companies explored a merger in 2016 instigated by the Redstone family, but those talks ended unsuccessfully, due to concerns by CBS about price and governance issues.

Since then, Viacom CEO Bob Bakish has taken a number of steps to boost the company’s performance, including improving relations with cable and satellite companies, causing some analysts to expect CBS to acquire Viacom at a premium.

Many of Viacom and CBS's competitors are merging as scale becomes increasingly important in the media landscape, with more customers cancelling pricey cable contracts, and Netflix Inc NFLX.O and Amazon.com Inc AMZN.O spending billions of dollars on making shows and movies.

Walt Disney Co DIS.N announced in December it would buy the majority of Twenty-First Century Fox Inc's FOX.A assets. Discovery Communications recently bought Scripps Networks Interactive Inc SNI.O.