CBS Sues National Amusements For Voting Control, Stops Viacom Merger

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On Wednesday, the company will hold its 2018-2019 Upfront presentation in NY.

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.

CBS's lawsuit said Redstone rejected an approach by an unnamed potential acquirer of CBS, citing that as another reason her interests are not aligned with other CBS shareholders. Redstone reportedly expressed her willingness to replace CBS directors to compel a merger with Viacom regardless of the Special Committee's process, deliberations, and conclusion'.

Today, it is the controlling shareholder of both CBS and Viacom.

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

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.

"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", CBS said.

It added: "If consummated, the dividend would enable the company to operate as an independent, non-controlled company and more fully evaluate strategic alternatives". With Monday's Closing Bell on Wall Street, CBS shares were up $1.14 to $53.66 - their highest close since April 4.

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National Amusements owns a majority of the voting shares in both CBS Corp. and Viacom, the media company behind Paramount Studios and the cable networks Comedy Central, MTV and BET.

Multiple sources say Verizon had been involved in high-level discussions with CBS a year ago.

Lawyers for CBS reveal in the filing that the board of directors plans to hold an emergency meeting on Thursday to discuss ways to dilute National Amusement's voting power moving forward.

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