CBS, Viacom had agreed on price for deal before lawsuit, sources say

CBS, Viacom had agreed on price for deal before lawsuit, sources say

The feud between CBS and National Amusements has descended into a playground brawl.

Taking the fight over a CBS-Viacom remerger to a new level, CBS on Monday filed a lawsuit against its controlling stakeholder Shari Redstone and National Amusements.

The suit seeks to push through the issue of a stock dividend that would dilute National Amusements' voting interest from about 79 percent to 17 percent, CBS said in a statement.

"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., now the controlling stakeholder for CBS", The Hollywood Reporter's THR, Esq., reports.

The lawsuit alleges that Shari Redstone is seeking "to force through a merger of CBS and Viacom on terms that are contrary to the best interests of the public stockholders - without allowing them any voice on the transaction".

It then lists a number of ways that Shari has allegedly abused her power to undermine the board and hijack control for herself and National Amusements. The stock decreased 4.90% or $1.48 during the last trading session, reaching $28.74.

HP updates Envy, Elite PC portfolios
HP rates this model for up to 12 hours and 45 minutes of usage, which we look forward to testing with the Laptop Mag Battery Test. The Envy Curved AIO 27 features up to an Intel Core i7-8700T processor and Nvidia GeForce GTX 1050 4GB graphics.

Sumner Redstone split his media empire into two pieces 12 years ago, creating CBS and Viacom in their present form. A sticking point in merger talks is what role her handpicked lieutenant - Viacom CEO Bob Bakish - would play.

National Amusements believes a deal is needed for the two media companies to gain scale and compete with growing internet powers Netflix Inc and Amazon.com Inc pushing deeper into the media business. Sumner Redstone's iPad has a button for moments like these, but National Amusements used tamer language: It is "outraged" and committed "to a well-governed process", adding that it had no intention to replace CBS's board or force a deal that wasn't supported by both sides.

USA media giant CBS filed suit on Monday, alleging that majority shareholder Shari Redstone is seeking to "force" a merger with rival Viacom on unfavorable terms. "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.

CBS said in February it had established a committee to consider reuniting the two companies, combining CBS with Viacom's networks, which include Nickelodeon, MTV, BET and Comedy Central.

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.

CBS is pursuing a temporary restraining order against Redstone to prevent alleged abuse of voting control and interference with intended share dilution.

Related Articles