CBS votes to end Redstone control, needs court approval
Reuters
Published May 17, 2018 07:39PM ET
CBS votes to end Redstone control, needs court approval
By Tom Hals and Jessica Toonkel
(Reuters) - CBS Corp's (N:CBS) board on Thursday voted to end Shari Redstone's control of the company, a move aimed at stopping a merger between CBS and sister company Viacom Inc (O:VIAB) and which will require approval by a Delaware court.
The board approved 11-3 a special dividend that would cut the Redstone family's stake to about 20 percent from 80 percent, CBS said in a statement.
The Redstone family's National Amusements Inc controls both CBS and Viacom. NAI has said it wants to merge them if both companies support the deal.
"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," CBS said in a statement.
NAI on Wednesday, however, amended the company's bylaws to require a supermajority of 90 percent to approve the issuance of a special dividend.
"In light of the board’s action today, that action was plainly necessary, and it is valid," NAI said in a statement.
"CBS management and the special committee cannot wish away the reality that CBS has a controlling shareholder," it added.
The CBS board had planned to argue that Redstone's bylaw amendment did not apply at Thursday's meeting because in the company's view such changes require a 20-day notice period, sources told Reuters ahead of the meeting.
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