UPDATE: CBS shareholders voted to strip Sumner Redstone’s voting control of the company on May 17. The meeting did not include Redstone's daughter Sheri Redstone or any National Amusements shareholders. It is not clear how this affects Redstone’s wealth or the desired CBS-Viacom merger.
“CBS management and the special committee cannot wish away the reality that CBS has a controlling shareholder,” National Amusements spokeswoman Sara Evans said in a statement.
A judge denied CBS Corp.’s attempt to get a temporary restraining order against Sumner Redstone’s National Amusements Inc., a move that could have stymied Redstone’s desired merger between CBS and Viacom Inc.
Delaware Chancery Court Chancellor Andre Bouchard denied in a May 17 written ruling CBS’s motion for a temporary restraining order against National Amusements from participating in a shareholder conference scheduled for later the same day.
Bouchard wrote that CBS may have an argument that National Amusements, which has controlling shares in CBS and Viacom, has breached its fiduciary duty. But the judge found that there is no legal precedent for freezing out a company’s top shareholder.
CBS executives including President Leslie Moonves sought to exclude Redstone, and the mogul’s daughter Shari Redstone, in order to approve giving stockholders of non-voting CBS shares voting power.
The gambit would have diluted National Amusements’ controlling stake, and let CBS block a merger with Viacom, whose share price has been in steady decline over the last few months.
Sumner Redstone has a net worth of $4.3 billion, according to LA Business Journal tabulations, the lion’s share of which come from his CBS and Viacom stock holdings. The media titan cannot speak, and his daughter has taken control over the company holdings – and driven the move to merge CBS and Viacom.
Media and entertainment reporter Matthew Blake can be reached at 323-556-8332 or firstname.lastname@example.org