CBS Sues To Ice Viacom Reunification

Courting Sumner Redstone and his daughter Shari are being sued by CBS Corporation for trying to push through a merger with Viacom that was rejected by the board

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

On Wednesday, the company will hold its 2018-2019 Upfront presentation in NY. On Monday, CBS filed a lawsuit against National Amusements and its president, Shari Redstone, to block it from forcing the merger. At that meeting, CBS is expected to propose a Class A common stock dividend that would dilute National Amusements' voting interest from approximately 79% to 17%.

A renewed effort in recent months had CBS offered a plan to acquire Viacom for what Viacom believes was an under-priced agreement.

Today, it is the talk of Wall Street, thanks to the filing of a lawsuit in DE by CBS Corp. and its Special Committee of its Board of Directors alleging breaches of fiduciary duty by National Amusements Inc. - the Shari Redstone-controlled entity that controls CBS and Viacom and wants the companies to recombine.

Talk of a possible merger between CBS and Viacom has circulated for weeks, though discussions appear to have stalled as the companies try to thrash out issues related to valuation and who would control the combined entity.

CBS and Viacom had reached a deal in price for a merger of the two, according to sources familiar with the situation.

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In a terse explanation, CBS said the dividend would not dilute the economic interests of any CBS stockholder. "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.

National Amusements owns a majority of the voting shares in both CBS Corp. and Viacom, the media company behind Paramount Studios and the cable networks Comedy Central, MTV and BET.

Neither CBS nor National Amusements would comment, and Verizon did not respond to multiple requests seeking comment.

"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.

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