CBS sues to block effort to 'force' merger with Viacom

CBS sues to block effort to 'force' merger with Viacom

National Amusements, a privately held movie theater company owned by Sumner Redstone and his daughter Shari, own a majority of the voting shares in both companies.

'The Special Committee believes that the Company and its publicstockholders face a serious threat of imminent, irreparable harm in Ms. Redstone's potential response to the Special Committee's unanimous decision yesterday, May 13, 2018, that the proposed Viacom transaction is not in the best interests of CBS stockholders, ' states the filing.

In recent months, Shari Redstone, president of National Amusements and vice chair of both CBS and Viacom, has pushed for CBS and Viacom to re-merge.

The lawsuit, says CBS, seeks to prevent National Amusement from interfering with a special meeting of the Board of Directors, at which the directors will consider declaring a dividend of shares of Class A common stock to all of the company's Class A and Class B stockholders, as is permitted under CBS's charter.

CBS Corporation has filed a lawsuit alleging "breaches of fiduciary duty" by Shari Redstone and National Amusements.

"(CBS is) at least sending the signal and creating evidence they had the best interests of everyone in mind, and not her", said Brian Quinn, a professor at the Boston College Law School, referring to Shari Redstone. The stock decreased 6.98% or $2.11 during the last trading session, reaching $28.11.

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Viacom has made it no secret that it wants Moonves at the helm of a combined company, but the talks between the two have hit an impasse regarding the line of succession.

A DE court ruled in 2004 that the Hollinger board could dilute Black's voting control in response to what it considered to be the damage he had done to the company. "This precipitous lawsuit, and the efforts of CBS management and its "independent" directors to wrest voting control from NAI, are outrageous", National Amusements said.

In a sign that CBS is keeping the door open to negotiations with Redstone, CBS said in its lawsuit that if it is granted an injunction against Redstone, it would agree not to issue the dividend once it approves it, pending further orders from the court.

The situation surrounding the possible merger of Viacom and CBS generating some friction among the top brass - especially between Leslie Moonves and Shari Redstone - if a new lawsuit filed by CBS is any indication.

Analysts have said a merger would benefit Viacom more than the stronger CBS.

The undisclosed party is US wireless carrier Verizon Communications Inc, according to two sources familiar with the situation who requested anonymity to disclose confidential details.

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