May 14, 2018

CBS sues majority owners to block Viacom merger

Shari Redstone. Photo by Jesse Grant/Getty Images.

CBS Corporation filed a lawsuit Monday against majority shareholder Shari Redstone for alleged breaches of fiduciary duty — an attempt to block her and her holding company from forcing a merger between CBS and its former sister company Viacom.

Why it matters: It's the latest twist in an already long and dramatic merger process. While both parties have denied that management complications have been holding up deal negotiations, this shows that control over the new company is essential to CBS leadership, and they're willing to fight to block a merger that doesn't give them such power.

  • The proposal would dilute the shares of National Amusements — Redstone's media holding group — by over 60 percentage points, which would block it from replacing enough board members to push the merger through. It also asks for a temporary restraining order against Redstone to stop her from hurting the merger process.
  • The lawsuit was filed in the Delaware Court of Chancery by a special committee formed within CBS' board in an attempt to preserve CBS stockholders' best interest.

Later Monday, National Amusements fired back saying it is "outraged by the action taken by CBS and strongly refutes its characterization of recent events" and it defends to defend their position vigorously in court.

  • "NAI had absolutely no intention of replacing the CBS board or forcing a deal that was not supported by both companies.  NAI’s conduct throughout supports this, and reflects its commitment to a well-governed process."

National Amusements says CBS’s public lawsuit was precipitated following National Amusements "raising specific concerns about incidents of bullying and intimidation in relation to one CBS director, dating back to 2016."

Axios reported last month that CBS Chairman and CEO Leslie Moonves asked in 2016 to remain Chairman of the Board of a combined CBS/Viacom and for his CBS management team to "have complete and irrevocable authority to manage the combined businesses."

Go deeper: Ongoing tensions between Shari Redstone and CBS chief Les Moonves

Go deeper

U.S. coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios. This graphic includes "probable deaths" that New York City began reporting on April 14.

More than 62,300 U.S. health care workers have tested positive for the novel coronavirus and at least 291 have died from the virus, the Centers for Disease Control and Prevention reported on Tuesday. COVID-19 had infected about 9,300 health professionals when the CDC gave its last update on April 17.

By the numbers: More than 98,900 people have died from COVID-19 and over 1.6 million have tested positive in the U.S. Over 384,900 Americans have recovered and more than 14.9 million tests have been conducted.

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 11:00 p.m. ET: 5,589,626 — Total deaths: 350,453 — Total recoveries — 2,286,956Map.
  2. U.S.: Total confirmed cases as of 11:00 p.m. ET: 1,680,913 — Total deaths: 98,913 — Total recoveries: 384,902 — Total tested: 14,907,041Map.
  3. Federal response: DOJ investigates meatpacking industry over soaring beef pricesMike Pence's press secretary returns to work.
  4. Congress: House Republicans to sue Nancy Pelosi in effort to block proxy voting.
  5. Business: How the new workplace could leave parents behind.
  6. Tech: Twitter fact-checks Trump's tweets about mail-in voting for first timeGoogle to open offices July 6 for 10% of workers.
  7. Public health: Coronavirus antibodies could give "short-term immunity," CDC says, but more data is neededCDC releases guidance on when you can be around others after contracting the virus.
  8. What should I do? When you can be around others after contracting the coronavirus — Traveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  9. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 49 mins ago - Politics & Policy

World coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Axios Visuals

There are no COVID-19 patients in hospital in New Zealand, which reported just 21 active cases after days of zero new infections. A top NZ health official said Tuesday he's "confident we have broken the chain of domestic transmission."

By the numbers: Almost 5.5 million people have tested positive for the novel coronavirus as of Tuesday, and more than 2.2 million have recovered. The U.S. has reported the most cases in the world (over 1.6 million from 14.9 million tests).