At the recent meeting by the CBS board, majority of directors voted to decrease Shari Redstone’s stake in the Tiffany Network.
According to The Post, “All Les Moonves-friendly directors not affiliated with Redstone-controlled National Amusements Inc. (NAI) voted to issue a pro rata dividend to both Class A and Class B shareholders — a move that would reduce Redstone’s voting power to 20 percent.”
In a statement, CBS said, “The Board of Directors 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.”
The newly declared dividend, CBS said, would be “conditioned on a final determination by the Delaware courts,” including all appeals being exhausted.
The 2018 shareholders meeting that CBS had planned for Friday, May 18, was decided by the network to be postponed, because of the two companies’ pending litigation.
79.6 percent of the voting shares are currently owned by the Redstone family, through National Amusements.
Despite the ruling made by a court Thursday morning, May 17, which denied the efforts of CBS to stop Redstone from messing with the vote, the board of the company still held the meeting.
The temporary restraining order that Judge Andre Bouchard of Delaware’s Chancery Court had issued on Wednesday, May 16, was rescinded by his Thursday ruling.
Leslie Moonves, the board chairman, president and CEO of CBS, was dealt a defeat by the decision to revoke the temporary restraining order, which has now set the stage for an even more bitter battle in court.
A CBS special committee said that the dividend was of the utmost importance in order to stop Redstone from merging CBS with Viacom, which the company owns 80 percent of the voting shares in.
In court papers, the special committee said, “The merger is not in the best interests of all CBS stockholders.”
Following the CBS board meeting, NAI said that “it has no intention of forcing a merger that is not supported by both CBS and Viacom.” The efforts of CBS to prevent the merge were dismissed by NAI as “pure pretext.”
In a statement, NAI said, “CBS management and the special committee cannot wish away the reality that CBS has a controlling shareholder.”
According to The Post, “Less than an hour before Wednesday’s court hearing, NAI moved to change CBS bylaws to require a super-majority vote — or a 90 percent vote, meaning 13 of the 14 CBS board members — to allow such a dividend. Bouchard, who observers said will likely see both parties back in court very soon, acknowledged the lack of precedent, saying no ‘court has ever entertained, much less sanctioned, the type of request for relief that plaintiffs make here.’ But he added his denial of the TRO was based on CBS’ future right to pursue judicial review should NAI move to kick a member from the board.”
By: Cynthia Mullivan