Monday, 17 December, 2018

CBS sues Redstone firm over dilutive dividend, endangering Viacom deal

CBS Sues Controlling Shareholder National Amusements Accuses Shari Redstone Of Undermining Board CBS sues Redstone firm over dilutive dividend, endangering Viacom deal
Nellie Chapman | 15 May, 2018, 01:56

National Amusements, which controls CBS and Viacom, has been trying to merge the two companies.

Neither CBS nor National Amusements would comment, and Verizon did not respond to multiple requests seeking comment. It also accuses Ms. Redstone of interfering with the nominating and governance committee process.

'Ms. Redstone has acted to undermine CBS's highly lauded and successful management team in a series of escalating attacks, including by talking to potential CEO replacements without Board approval and deriding executives, ' declares another. "These escalating attacks make it hard for management to perform its duties and threatens continuity of management".

"The Special Committee has taken this step because it believes it is in the best interests of all CBS stockholders, is necessary to protect stockholders" interests and would unlock significant stockholder value'.

According to reports, CBS has always been reluctant to do the deal, first starting in 2016, when Redstone initially pushed the idea.

"This behavior and the uncertainty and negative public attention it has engendered have harmed CBS and its stockholders and will continue to do so", the suit states.

The agreed upon price was a ratio of 0.6135 CBS shares for every Viacom class B share. "This loss of market value has occurred despite management consistently delivering excellent results".

CBS is suing National Amusements, the media company's majority shareholder, alleging that it is violating its fiduciary duty to investors by pushing for a merger with Viacom. "If consummated, the dividend would enable the Company to operate as an independent, non-controlled company and more fully evaluate strategic alternatives", CBS wrote in a release.

'The dividend, if issued, would dilute National Amusements, Inc.'s voting interest from approximately 79% to 17%. "Judges typically are sympathetic to applications for temporary restraining orders when there is a matter of great seriousness that might be upset if this injunction isn't put in place".