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CBS declares war on Shari Redstone over Viacom merger

CBS declares war on Shari Redstone over Viacom merger

The process of diluting the control of National Amusements and thus both Redstones was also addressed in a release sent out by CBS on Monday.

CBS is seeking a temporary restraining order "to protect the status quo and to prevent imminent and irreparable harm" from merging CBS and Viacom, two media groups which were split a decade ago by the elder Redstone.

The news of the lawsuit, filed to a DE court and also seeking to dilute the 79 percent voting rights in CBS held by Redstone's National Amusements Inc., pushed the network's shares (CBS) up almost 1 percent and those in Viacom (VIA) down 6 percent.

During the CBS board meeting Thursday, the directors will consider a dividend of Class A shares to Class B shareholders that would dilute National Amusements' voting interest from about 80 percent to 17 percent.

"In a move that escalates an internal battle for control, CBS has filed a lawsuit in Delaware Chancery Court against Shari Redstone, Sumner Redstone and National Amusements, Inc., now the controlling stakeholder for CBS", The Hollywood Reporter's THR, Esq., reports. Although NAI holds voting power in CBS, it only owns just over 10 percent of the economic interest in CBS.

"National Amusements had absolutely no intention of replacing the CBS board or forcing a deal that was not supported by both companies", it said in a statement.

National Amusements controls a similar share of the vote at Viacom. Norinchukin Bank The now owns 28,209 shares of the company's stock valued at $869,000 after purchasing an additional 1,955 shares in the last quarter. A sticking point in merger talks is what role her handpicked lieutenant - Viacom CEO Bob Bakish - would play.

A DE court ruled in 2004 that the Hollinger board could dilute Black's voting control in response to what it considered to be the damage he had done to the company.

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.

Shari Redstone was surprised by the lawsuit, particularly since CBS and Viacom had informally agreed on a stock exchange ratio for a deal of 0.6135 CBS shares for every Viacom class B share, according to people familiar with the situation.

Indeed, CBS shareholders appear to be more content without the weight of a relaunched Viacom to worry about.

The undisclosed party is USA wireless carrier Verizon Communications Inc, according to two sources familiar with the situation who requested anonymity to disclose confidential details.

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