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CBS and the Redstones may want to book Judge Judy

CBS and the Redstones may want to book Judge Judy

CBS Corp. essentially declared war on Shari Redstone on Monday, filing a lawsuit meant to thwart her effort to push through a merger of CBS and Viacom Inc.

Redstone wants the two companies to combine, and this is the second time in two years that she has tried to make a merger happen.

As permitted under CBS' charter, the network says it could declare a dividend of shares of Class A common stock to all the Company's Class A and Class B stockholders.

"This precipitous lawsuit, and the efforts of CBS management and its "independent" directors to wrest voting control from NAI, are outrageous", National Amusements said.

NAI has voting control of both CBS and Viacom. Both companies are under the umbrella of Redstone-controlled holding company National Amusements.

Sumner Redstone split his media empire into two pieces 12 years ago, creating CBS and Viacom in their present form. The move comes as National Amusements has again pursued recombining CBS and Viacom. "CBS's stock price has dropped from almost $70 per share to almost $50 per share since merger talks were reinstated-a loss of approximately $7 billion in market cap suffered by the Class B stockholders".

The suit, filed Monday in Delaware Chancery Court, seeks to prevent National Amusements' president and controlling shareholder, Shari Redstone, from interfering with a planned meeting this week by CBS' board of directors to consider issuing a special dividend to stockholders that would effectively weaken her control of the media company.

CBS's lawsuit said Redstone rejected an approach by an unnamed potential acquirer of CBS, citing that as another reason her interests are not aligned with other CBS shareholders.

"National Amusements is outraged by the action taken by CBS and strongly refutes its characterization of recent events", Sara Evans, an outside spokeswoman for the Dedham, Massachusetts-based theater owner, said in an emailed statement. After a year and a half of resisting National Amusements's entreaties to pair up the businesses, CBS made a decision to challenge its controlling shareholder - a move that could give its leadership greater power to merge with other companies.

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