CBS sues National Amusements over Viacom remerger fight

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


The lawsuit accuses Shari Redstone, president of majority shareholder National Amusements and vice chair of both CBS and Viacom, of neglecting her fiduciary duty by pressing the deal against the will of the board and precipitating a $7-billion drop in CBS' market cap. On Wednesday, the company will hold its 2018-2019 Upfront presentation in NY.

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

The company is seeking 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.

Talk of a possible merger between CBS and Viacom has circulated for weeks, though discussions appear to have stalled as the companies try to thrash out issues related to valuation and who would control the combined entity.

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Redstone wants the two companies to combine, and this is the second time in two years that she has tried to make a merger happen. Analysts have said a merger would benefit Viacom more than the stronger CBS. With Monday's Closing Bell on Wall Street, CBS shares were up $1.14 to $53.66 - their highest close since April 4. National Amusements also controls around 80% of the voting shares of Viacom.

Shares of CBS were up more than 3 percent in morning trade on May 14 while Viacom shares declined almost 7 percent.

National Amusements called the lawsuit "outrageous" and said that it disputes CBS' "characterization of recent events.We intend to defend our position vigorously and look forward to presenting our arguments in court".

Redstone could counter sue CBS directors for a breach of loyalty, the sources said.

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