CBS sues key investor over Viacom merger

Shari Redstone in 2017Image copyright
Getty Images

Image caption

Shari Redstone in 2017

CBS has filed a lawsuit against its biggest shareholder, who is pushing to merge the US broadcaster with Paramount film studio-owner Viacom.

The board of CBS wants to block National Amusements Inc (NAI), a company owned by Sumner Redstone and his daughter Shari, from “interfering” in a meeting to discuss the merger.

It also wants to dilute the shareholdings of NAI, which has voting control at both CBS and Viacom.

NAI said it was outraged” at the move.

NAI is the parent company of both CBS and Viacom, which were separated by Sumner Redstone in 2005.

Shari Redstone is attempting to reunite the two businesses – the second time she has attempted to do so since 2016.

The companies have been in discussions about a merger since February but talks stalled over the price and who will sit on the combined board of directors.

On Sunday, a special committee set up by CBS to consider the deal unanimously decided not to go ahead with the merger.

It launched the lawsuit, claiming that “the company and its public stockholders face a serious threat of imminent, irreparable harm in Ms Redstone’s potential response” to the decision not to merge.

Restraining order

It is seeking a temporary restraining order to prevent her from interfering in a meeting on Thursday, when the firm plans to discuss issuing a dividend that would dilute NAI’s voting rights from 79% to 17%.

It said that its 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”.

It added: “If consummated, the dividend would enable the company to operate as an independent, non-controlled company and more fully evaluate strategic alternatives.”

In a statement, NAI said it had no intention of forcing a deal that did not have the support of both companies.

CBS shares climbed on Monday following news of the lawsuit.

Source link

About the Author

Leave A Response