Posted on 05/14/2018 8:59:17 AM PDT by Red Badger
A Delaware court is asked to stop Shari Redstone from interfering with a meeting later this week that could dilute her company's voting interest in CBS.
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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., currently the controlling stakeholder for CBS.
The Redstones have made it clear they would like to see CBS merge with Viacom. The Redstones hold Class A common stock in CBS, which means they currently have the voting power over other public shareholders who maintain Class B common stock.
But CBS, led by its chairman Leslie Moonves, has decided to put up a fight with a high-stakes gambit that could forever change authority at CBS by shifting power from the Redstones to public shareholders. Although NAI holds voting power in CBS, it only owns just over 10 percent of the economic interest in CBS. Those public shareholders with Class B stock own the rest.
A committee of independent directors at CBS has called for a meeting May 17 with the intention of issuing a dividend that would dilute the Redstones' NRI voting interest in CBS from approximately 79 to 17 percent. With the expectation that the Redstones may attempt to interfere with the planned meeting, CBS in a preemptive measure is demanding a temporary restraining order from a Delaware judge.
"The Special Committee believes that the Company and its public stockholders face a serious threat of imminent, irreparable harm in Ms. Redstone's potential response to the Special Committee's unanimous decision yesterday, May 12, 2018, that the proposed Viacom transaction is not in the best interests of CBS stockholders," states the TRO motion.
The lawsuit charges the Redstones with breaching their fiduciary duties.
According to the complaint, Shari Redstone has resisted governance protections being demanded, won't consent to allow public shareholders to vote on the Viacom merger and has been maneuvering to assert herself in other ways.
"CBS’s management team, led by Leslie Moonves (CEO and Chairman), is one of the most accomplished and successful in the media business," states the complaint. "In a demanding and rapidly changing marketplace, the Moonves-led team articulated a strategic plan, executed on that plan and consistently delivered superior results. Nevertheless, Ms. Redstone has acted to undermine the management team, including, without board authority, talking to potential CEO replacements, deriding the Chief Operating Officer and threatening to change the Board. These escalating attacks make it difficult for management to perform its duties and threatens continuity of management."
Ms. Redstone, the lawsuit continues, has discouraged at least one other company from pursuing an acquisition of CBS.
"This behavior and the uncertainty and negative public attention it has engendered have harmed CBS and its stockholders and will continue to do so," states the complaint. "CBS’s stock price has dropped from nearly $70 per share to nearly $50 per share since merger talks were reinstated — a loss of approximately $7 billion in market cap suffered by the Class B stockholders. This loss of market value has occurred despite management consistently delivering excellent results."
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I don’t care who wins as long as the Enemy Media loses! ;)
Isn’t CBS already a division of the democratic party?
The problem is that the majority shareholder can demand a vote and get rid of Moonves....
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