Published: Tue, May 15, 2018
Money | By Armando Alvarado

CBS sues Shari Redstone as it moves to lessen her control

CBS sues Shari Redstone as it moves to lessen her control

If the dividend is issued, National Amusements' voting interest would be diluted to under 17 percent. On Wednesday, the company will hold its 2018-2019 Upfront presentation in NY.

The two companies previously explored a merger in 2016 at the urging of Shari and Sumner Redstone, who believe a deal is needed for the two smaller media companies to compete with growing internet powers Netflix Inc and Amazon.com pushing deeper into the media business.

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.

Redstone, daughter of retired Viacom mogul Sumner Redstone, wants CBS and sister media company Viacom to merge - a move that CBS CEO Leslie Moonves and the CBS board of directors have had reservations about.

CBS is the corporate parent of CBS News and CBS MoneyWatch. On Friday, CBS will hold its annual shareholders meeting. The dividend would not dilute the economic interests of any CBS stockholder.

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National Amusements controls a similar share of the vote at Viacom.

It goes on to explain: 'If consummated, the dividend would enable the Company to operate as an independent, non-controlled company and more fully evaluate strategic alternatives'.

National Amusements, the investment vehicle controlled by the Redstone Family, owns almost 80 percent of Class A voting shares.

"Ms. Redstone, through her recently-obtained domination and control of [National Amusements], has taken actions over the past two years that have led the Special Committee to conclude that she presents a significant threat of irreparable and irreversible harm to the Company and its stockholders", said the lawsuit, filed Monday in Chancery Court in Delaware.

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