Most of CBS Corp.'s board on Thursday approved a special dividend that could enable the company to break free from its controlling shareholder, but the power struggle's outcome still hinges on an ongoing legal battle.
National Amusement Inc., currently CBS's majority shareholder, would have its voting stake reduced from 79 percent to 17 percent if the dividend is issued.
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But that can't happen unless New York-based CBS can overturn a recent change requiring the dividend be approved by a "supermajority" of its 15-member board.
The dividend was approved by all of CBS's directors not affiliated with NAI. That means NAI can still veto the dividend and preserve its control.
NAI, led by the daughter of media mogul Sumner Redstone, indicated it would block the dividend in a statement that called Thursday's vote "pure pretext."
CBS postponed an annual shareholder meeting scheduled for Friday until the matter is resolved in Delaware court. It acknowledged that the payment of the special dividend is "is conditioned on a final determination by the Delaware courts."
Earlier Thursday, a Delaware judge refused to grant CBS a restraining order against NAI. CBS sought the restraining order in conjunction with a lawsuit filed Monday alleging that NAI was breaching its fiduciary duties to CBS and other shareholders and trying to undermine the authority of its management and board of directors.
CBS, led by CEO and Chairman Les Moonves is pushing back against pressure by National Amusements to merge with Viacom, which also is controlled by National Amusements.
CBS and Viacom were once part of the same company, known as Viacom, but were split in 2005 into separate entities, both controlled by Sumner Redstone. Shari Redstone has been pushing to reunite the companies under one corporate umbrella, but a CBS special board committee concluded Sunday that the merger would not be in the company's best interest.
CBS shares fell more than 4 percent to $51.61 on Thursday.