National Amusements Fires Back At CBS In New Complaint Blasting “Unprecedented,” “Hastily Called” Board Meeting
May 29, 2018
National Amusements Fires Back At CBS In New Complaint Blasting “Unprecedented,” “Hastily Called” Board Meeting
Shari Redstone’s National Amusements fired back at CBS and its CEO, Leslie Moonves, in a new filing this morning in the companies’ legal brawl in U.S. District Court in Delaware.
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“This case is about extraordinary, unjustified and unlawful actions by certain of the Directors” of CBS, the complaint says, “to unilaterally dilute the voting rights of its controlling stockholder, NAI, for all purposes and for all time. It is undisputed that the Director Defendants’ actions are unprecedented under Delaware law.”
CBS has accused National Amusements, which controls nearly 80% of it and Viacom, of degrading the value of CBS by trying to force a merger of the two companies. Merger talks went off the rails earlier this year over disagreements about the management team and financial terms. Today’s complaint, accompanied by an official statement, took pains to debunk that scenario, insisting it was CBS acting recklessly when it scheduled a special board meeting on May 17. The meeting resulted in a vote to reduce NAI’s control, which is achieved through the dual-class stock ownership structure.
The complaint calls the May 17 special meeting “hastily called and perfunctory.”
In its statement, NAI said the effort to elbow Redstone out of the way was especially surprising given the tenor of earlier discussions between Moonves and Redstone. “Earlier this year,” the statement said, “Shari Redstone and Les Moonves discussed and agreed that recombining CBS and Viacom would benefit both companies’ shareholders, providing greater scale as needed for success in today’s media and entertainment landscape, and better positioning the companies for a larger transaction in which the combined entity could fetch an attractive premium that neither CBS nor Viacom alone could command. Shari Redstone told Les Moonves that NAI would consider relinquishing its controlling interest in the context of such a transaction.”
More to come …