Published: Fri, May 18, 2018
Business | By Tara Barton

Judge Rejects CBS Move to Strip Shari Redstone's Control of Company

Judge Rejects CBS Move to Strip Shari Redstone's Control of Company

After learning of the meeting, Redstone rewrote CBS' bylaws to require a 90% supermajority to call special board meetings. Finally, Pivotal Research restated a "hold" rating and issued a $64.00 target price (up previously from $62.00) on shares of CBS in a report on Tuesday, January 9th. Shari Redstone and National Amusements retained 80-percent voting power in both CBS and Viacom, despite holding a 10-percent stake in each company. Yet, CBS's claims are "sufficient to state a colorable claim for breach of fiduciary duty against Ms. Redstone and NAI as CBS's controlling shareholder".

Shares of CBS fell 6 percent on news of the judge's ruling, while shares of Viacom were down 0.8 percent. These and other forward looking statements involve known and unknown risks, uncertainties and other factors that are hard to predict and which may cause the actual effects of the stock dividend and the lawsuit to be different from those expected by the Company.

But Redstone's camp says she has no intent to "force" a merger. This case examines this power dynamic. The court said the restraining order wasn't necessary because the company can legally challenge board maneuvers from Redstone. If consummated, the dividend would enable the Company to operate as an independent, non-controlled company and more fully evaluate strategic alternatives. They said, 'In three days - we'll give you one day to prepare papers and one day to come into court; but in three days, we're going to hold a meeting and go nuclear on you.

"CBS management and the special committee can not wish away the reality that CBS has a controlling shareholder", the company said in a statement.

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Kotler acknowledged this point as being true.

CBS (NYSE:CBS) last issued its quarterly earnings data on Thursday, May 3rd. NAI denied it was about to make such a move. More interesting news about CBS Corporation (NYSE:CBS) were released by: Benzinga.com and their article: "Bernstein: 'Almost 0%' Chance Of A CBS-Viacom Reunion" published on May 15, 2018 as well as Seekingalpha.com's news article titled: "CBS Q1: Growth Goals On Track" with publication date: May 09, 2018. "Exercise of that right, of course, is subject to judicial review, which can afford full relief in this circumstance in my opinion to vindicate the interests of CBS and its stockholders, if appropriate".

"The court's ruling today represents a vindication of National Amusements' right to protect its interests", the company said in a statement.

CBS, in its own statement, said that although it was disappointed by the outcome, "the ruling clearly recognizes that we may bring further legal action to challenge any actions by N.A.I. that we consider to be unlawful, and we will do so". Though essentially a gesture at best, that vote to exchange non-voting shares in CBS for a class of stock with voting rights will still happen, the Les Moonves run media corporation insisted this morning after Chancellor Andrew Bouchard's order knocking down their TRO motion. Dalton Greiner Hartman Maher & Co. purchased a new position in shares of CBS in the 4th quarter valued at about $19,014,000.

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