CBS Sues National Amusements For Voting Control, Stops Viacom Merger

Leslie Moonves wants to pick his own team to lead CBS-Viacom. But Redstone wants Viacom CEO Bob Bakish to be a part of it setting up Bakish as a future CEO

Verizon had expressed interest in acquiring CBS before merger talks heated up with its corporate sibling Viacom, sources say.

This surprising turn of events comes after CBS, Viacom and National Amusements spent months discussing a potential remerger of CBS and Viacom, approximately 12 years after the companies first split.

CBS "seeks a temporary restraining order to prevent Redstone and National Amusements Inc. - the Redstone family investment vehicle that is the controlling stockholder of both CBS and Viacom - from trying to change CBS' board members or governance documents before the board can meet Thursday and work to dilute the Redstones' control over the company". "These escalating attacks make it hard for management to perform its duties and threatens continuity of management", the filing states.

The process of diluting the control of National Amusements and thus both Redstones was also addressed in a release sent out by CBS on Monday.

"The 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'.

Ms. Redstone recently once again proposed a CBS-Viacom merger, which the special committee concluded is not in the best interests of CBS and its stockholders.

"This behavior and the uncertainty and negative public attention it has engendered have harmed CBS and its stockholders and will continue to do so", the suit states. "This loss of market value has occurred despite management consistently delivering excellent results".

CBS has filed a suit against National Amusements alleging breach of fiduciary duty and seeking to prevent it from interfering in a special meeting where CBS directors will consider a dividend of class A common shares to be distributed to all stockholders. If the dividend is issued, National Amusements' voting interest would be diluted to under 17 percent. It wouldn't dilute economic interests of any shareholder.

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