CBS sues to block effort to 'force' merger with Viacom

CBS sues to block effort to 'force' merger with Viacom

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.

'Ms. Redstone has acted to undermine CBS's highly lauded and successful management team in a series of escalating attacks, including by talking to potential CEO replacements without Board approval and deriding executives, ' declares another.

CBS Corp. essentially declared war on Shari Redstone on Monday, filing a lawsuit meant to thwart her effort to push through a merger of CBS and Viacom Inc.

Shari Redstone sits on the boards of CBS and Viacom, and is the president of National Amusements, the movie theater chain through which her family controls those two media companies. National Amusements denied it had any plan to oust CBS's board.

News of the lawsuit sent CBS shares up almost 3 percent and Viacom shares down more than 6 percent. "The Redstones have made it clear they would like to see CBS merge with Viacom". National Amusements' Shari Redstone was reportedly pushing for Viacom CEO Bob Bakish to be installed a chief operating officer of the combined company, while CBS CEO Les Moonves reportedly wanted to keep his current COO, Joe Ianniello.

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

On Monday CBS asked a DE court for a temporary restraining order that would prevent the Redstones from exerting their influence and allow the board to vote through a measure that would mute the Redstone holding. Since then, the two sides have argued over price and who will lead the combined company.

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%. CBS wants to head off a threat by heiress Shari Redstone to oust some of the network's directors and block a shareholder vote on a proposal to lessen the Redstones' control of the broadcaster.

National Amusements reacted by saying it is "outraged" that CBS would file a lawsuit, noting that it has "no intention of replacing the CBS board or forcing a deal that was not supported by both companies".

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