CBS Sues Controlling Shareholder Redstone Over Proposed Viacom Deal

CBS Sues Controlling Shareholder National Amusements Accuses Shari Redstone Of Undermining Board

CBS Sues Controlling Shareholder Redstone Over Proposed Viacom Deal

Ms. Redstone recently once again proposed a CBS-Viacom merger, which the special committee concluded is not in the best interests of CBS and its stockholders.

The agreed upon price was a ratio of 0.6135 CBS shares for every Viacom class B share.

"In a move that escalates an internal battle for control, CBS has filed a lawsuit in Delaware Chancery Court against Shari Redstone, Sumner Redstone and National Amusements, Inc., now the controlling stakeholder for CBS", The Hollywood Reporter's THR, Esq., reports.

Ms. Redstone has called the CBS Lawsuit 'Outrageous, "Precipitous, ' and 'Bullying.' A statement from National Amusements responded, "NAI had absolutely no intention of replacing the CBS board or forcing a deal that was not supported by both companies".

CBS does not want to be weighed down by Viacom's struggling cable channels.

At its meeting on Thursday, CBS's special committee of directors intends to recommend a stock dividend that would dilute National Amusements Inc's (NAI) voting power to 17 percent from 80 percent.

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The network suit is an effort to stop Shari Redstone from copying her father's 2016 gambit to reassert control over the Viacom board once questions arose about whether the billionaire's mental capabilities were waning.

That dividend would dilute National Amusements' (and Shari Redstone's) voting interest to about 17% from a current 79%. This sparked fears that the Redstone's were planning to repeat their actions of two years ago that led to wholesale changes on the CBS board.

The two committees have been working on the possible merger since February. The valuation marked a compromise for both sides and is a sign that CBS had previously supported exploring a merger of the two companies.

A long-simmering dispute between CBS and the daughter of billionaire Sumner Redstone erupted into open warfare, throwing a potential deal with Viacom into doubt. Although NAI holds voting power in CBS, it only owns just over 10 percent of the economic interest in CBS.

CBS's lawsuit said Redstone rejected an approach by an unnamed potential acquirer of CBS, citing that as another reason her interests are not aligned with other CBS shareholders.

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