CBS Sues Majority Shareholder in an Attempt to Stop Viacom Merger

On Monday, CBS Corp made a bid for independence when the company filed a lawsuit to reduce the voting power of National Amusements Inc.

On Monday, CBS Corp made a bid for independence when the company filed a lawsuit to reduce the voting power of National Amusements Inc, an entertainment company owned by Shari and Sumner Redstone. The lawsuit is in response to a merger proposed by Redstone that would join CBS Corp with Viacom.

The lawsuit, filed with the court of Chancery in Delaware, is requesting that National Amusements be barred from changing any of the company’s bylaws or making executive changes prior to a complete board meeting scheduled for Thursday. The meeting will decide whether or not to issue a dividend that would reduce National Amusements’ voting power from 80 percent to a more appropriate 17 percent.

According to an article released by Reuters, National Amusements is denying any plans to thwart the upcoming meeting. The company issued a statement, saying, “National Amusements has absolutely no intention of replacing the CBS board or forcing a deal that was not supported by both companies. National Amusements’ conduct throughout supports this, and reflects its commitment to a well-governed process.”

The CBS complaint stems from a previous merger attempt in February that failed due to numerous disagreements over the price and future leadership of the company. They fear that Redstone will use her majority power to force the merger even if it isn’t supported by the board and feel that limiting her voting power will allow for an unbiased decision.

National Amusements claims that the merger is necessary in order to allow the two smaller companies to compete with quickly growing entities like Netflix and Amazon Inc. CBS believes that Redstone is entertaining other interests that don’t align with their own, making her decisions potentially detrimental to the company and other shareholders.

Delaware Chancellor Andre Bouchard with decide whether to approve the restraining order proposed by CBS on Wednesday.

Patricia Howard

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Patricia Howard is a freelance journalist and Netflix enthusiast from rural Indiana. She has a bachelor''s degree in communication with a concentration in journalism. When Patricia isn''t writing, she enjoys catching up on her favorite shows with her husband and seven children.

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