The board of CBS voted on Thursday to strip the Redstone family's holding company of voting control, escalating the battle between Les Moonves and Shari Redstone.
It approved a dividend to dilute the voting stake of National Amusements Inc. to about 20%.
"The Board of Directors has taken this step because it believes it is in the best interests of all CBS stockholders," CBS said in a press release.
Earlier Thursday, a Delaware Chancery Court judge denied a request from CBS for a temporary restraining order against the holding company, the controlling shareholder of the broadcaster. National Amusements has been seeking to block the attempt by CBS to dilute Redstone’s voting power.
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CBS sued National Amusements earlier this week after a contentious round of negotiations in which Redstone was pushing for a merger of CBS with the other media company her family controls, the ailing Viacom unit of National Amusements.
“As National Amusements has repeatedly stated, it has no intention of forcing a merger that is not supported by both CBS and Viacom," NAI said in a statement. "Today’s board vote, while couched as an effort to prevent such a transaction, was pure pretext. CBS management and the special committee cannot wish away the reality that CBS has a controlling shareholder. NAI yesterday exercised its legal right to amend the company’s bylaws to require a supermajority vote on certain board actions with respect to dividends, effective immediately. In light of the Board’s action today, that action was plainly necessary, and it is valid.”
FOX Business reported Tuesday that Moonves has acknowledged to insiders at the company that his battle with Redstone could end with its sale to another player in the rapidly evolving media business.
Moonves has balked over price and Redstone’s management demands. In recent years, she has assumed a more public role for the companies her family controls after her father, Sumner, suffered from health issues.