CBS sues Shari Redstone as it moves to lessen her control | Major Businesses | Business
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US broadcast giant CBS is suing its controlling shareholder, Shari Redstone, in a bid for independence.
redstonecbs 15 may 2018

Redstone, daughter of retired Viacom mogul Sumner Redstone, wants CBS and sister media company Viacom to merge – a move that CBS CEO Leslie Moonves and the CBS board of directors have had reservations about. Both companies are under the umbrella of Redstone-controlled holding company National Amusements.

In a plan that would radically dilute Redstone’s stake in the company from 79% to 17% (and her influence over merger negotiations), CBS is planning to hold a special shareholder meeting on Thursday to approve a dividend declaration. The lawsuit seeks a temporary restraining order to prevent Redstone from interfering with the action.

"The Special Committee members, all independent directors of the Company, unanimously believe that the CBS Board has a fiduciary duty to act now to protect all stockholders and prevent Ms. Redstone from further breaches of her fiduciary duties," CBS in the lawsuit.

The suit alleges that Redstone has "improperly interjected herself into negotiations" about the merger and has "acted to undermine CBS's highly lauded and successful management team in a series of escalating attacks."

National Amusements called the lawsuit "outrageous" and said that it disputes CBS’ "characterization of recent events...We intend to defend our position vigorously and look forward to presenting our arguments in court."

Viacom has made it no secret  that it wants Moonves at the helm of a combined company, but the talks between the two have hit an impasse regarding the line of succession.

Moonves wants CBS COO Joseph Ianniello to be president and COO of the merged entity, and to succeed him as CEO when he retires. The Redstone family instead wants Viacom CEO Bob Bakish to be the No 2 and succeed Moonves when the time comes.

Sources told Reuters that Shari Redstone has offered to drop demands for Bakish to have a role beyond being on the combined company’s board.

A hearing is expected later this week.