CBS is officially fighting back.
The TV network led by Les Moonves asked a Delaware court on Monday to block controlling shareholder Shari Redstone’s company, Redstones’ National Amusements, from interfering in a special meeting with its board members who are considering a merger with Viacom.
The lawsuit also said it wants to weaken Redstone’s voting rights from 79% to 17% in CBS that it currently holds in addition to its shares in Viacom, where Redstone sits as vice chairperson.
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In the lawsuit, CBS said Redstone has taken various actions over the past two years that have led the special committee of the board, which is considering the merger, to conclude that she “presents a significant threat” to both the company and its stockholders.
However, CBS said the dilution of National Amusement’s stake would occur through a special stock dividend.
“The [CBS] 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 in a statement.
“If consummated, the dividend would enable [CBS] to operate as an independent, non-controlled company and more fully evaluate strategic alternatives,” it said in the statement.
The news of lawsuit pushed CBS' share up 3%, while Viacome share dropped 3%.