CBS sues controlling Redstone family in bid for independence

CBS sues controlling Redstone family in bid for independence

On Wednesday, the company will hold its 2018-2019 Upfront presentation in NY.

CBS is seeking to call a special board meeting on May 17 at which directors will consider declaring a dividend of shares of Class A common stock to all the company's Class A and Class B shareholders.

"National Amusements is outraged by the action taken by CBS and strongly refutes its characterization of recent events", Sara Evans, an outside spokeswoman for the Dedham, Massachusetts-based theater owner, said in an emailed statement.

"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.

Additionally, in the proposed deal, Les Moonves, chairman/CEO of CBS would run the combine company, with Joe Iannielo, CBS' COO, becoming the No. 2 executive - leaving out Bob Bakish, president/CEO of Viacom.

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The lawsuit also claims that Ms. Redstone told the CEO of a potential acquirer of CBS that he should not make the offer, "thereby depriving CBS stockholders of a potentially value-enhancing opportunity", which the board or the special committee should have been free to evaluate.

"Ms. Redstone has acted to undermine the (CBS) management team, including, without board authority, talking to potential CEO replacements, deriding the chief operating officer and threatening to change the board", the lawsuit said. Analysts have said a merger would benefit Viacom more than the stronger CBS. "CBS's stock price has dropped from almost $70 per share to almost $50 per share since merger talks were reinstated-a loss of approximately $7 billion in market cap suffered by the Class B stockholders".

If the dividend is approved, National Amusements' voting rights in CBS would shrink to about 17 percent from about 80 percent, more in line with National Amusements' economic stake in CBS of 10.3 percent, according to CBS's lawsuit, filed with the Court of Chancery in Delaware.

"Ensuring the long-term success of CBS continues to be NAI's sole interest".

The lawsuit said Shari Redstone could force a merger by replacing CBS board members.

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