CBS Corp. Files Suit Against Shari Redstone & National Amusements

CBS Corp. Files Suit Against Shari Redstone & National Amusements

National Amusements responded by saying it was "outraged" by the CBS lawsuit and its characterization of recent events.

Redstone indicated that she would see greater value in a Verizon bid for both CBS and Viacom - a position that some saw as chilling interest in a potential deal.

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%.

Today, it is the talk of Wall Street, thanks to the filing of a lawsuit in DE by CBS Corp. and its Special Committee of its Board of Directors alleging breaches of fiduciary duty by National Amusements Inc. - the Shari Redstone-controlled entity that controls CBS and Viacom and wants the companies to recombine.

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".

"National Amusements had absolutely no intention of replacing the CBS board or forcing a deal that was not supported by both companies", it said in a statement.

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Mid-Monday morning trading of CBS stock was up 1.2% to $53.23; Viacom was down 7% to $28.15. (NAI), the holding company created by her father, 94-year-old Sumner Redstone. The firm has "Hold" rating by Loop Capital given on Friday, November 17.

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

The dividend would not dilute the economic interests of any CBS stockholder, but would help the company to operate as an independent, non-controlled company and fully evaluate strategic alternatives, the company said.

"Even if Ms. Redstone does not attempt to force a merger with Viacom, the harm to CBS and it stockholders is clear: despite management's record performance in the face of Ms. Redstone's conduct, CBS's stock has fallen from almost $70 to around $50 in the last several months-an approximately $7 billion loss in market cap born by Class B stockholders", the suit states.

CBS Corporation has filed a lawsuit to stop a merger of CBS and Viacom, Inc. While there may be an obvious cultural misalignment between Verizon and CBS, a tie-up between the No. 1 US wireless carrier and the TV-network owner would be a natural response to the $109 billion pending merger between their rivals, AT&T Inc. and Time Warner Inc.

CBS's lawsuit has been assigned to Delaware Chancellor Andre Bouchard, who will consider the request for a temporary restraining order on Wednesday.

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