CBS Vote To Dilute Redstone Control Now Up To Court


A war between CBS Corp. and the Shari Redstone-controlled National Amusements Inc. is on.

In a vote held Thursday afternoon in defiance of an attempt by NAI to weaken and/or negate its outcome, CBS Corp.’s Board of Directors voted 11-3 to declare a pro rata dividend of 0.5687 shares of Class A common stock for each share of the company’s Class A and Class B common stock to stockholders of record on the record date, as is permitted under CBS’s charter.

The move is designed for one purpose: to prevent Redstone and NAI from forcing CBS’s merger with Viacom.

The payment of the dividend will now be up to Delaware Chancery Court Judge Andre Bouchard, who will make a final determination that includes any appeals.

The record date for the dividend, should Bouchard give his approval, would be 10 days following a ruling (or the next business day after the 10 day period). The payment date is expected to occur five business days after the record date or as soon as practicable thereafter.

The dividend, if issued, would dilute NAI’s voting interest from approximately 79% to approximately 20%.

The dividend would not dilute the economic interests of any CBS stockholder.

All non-NAI affiliated Board members voted for the dividend.

What about NAI’s right to protect its controlling interest?

CBS believes “the written consents delivered by NAI purporting to amend the company’s bylaws are neither valid nor effective.”

Why did CBS’s Board of Directors take this step?

“It is in the best interests of all CBS stockholders, is necessary to protect stockholders’ interests and would unlock significant stockholder value,” CBS said in a statement released following the vote on Thursday evening. “If consummated, the dividend would enable the company to operate as an independent, non-controlled company and more fully evaluate strategic alternatives.”

In after-hours trading on Thursday, CBS shareholders showed their approval, with shares up 41 cents to $52.02 at 7:59pm Eastern.


In light of the recent actions by NAI and the pending litigation in the Delaware Chancery Court, the Board of Directors determined to postpone its 2018 annual meeting of stockholders that was previously scheduled to take place Friday (5/18).

The Board will determine “shortly” a new record date for the meeting and will publicly announce the new date, time and location.

The postponement will provide all constituents with additional time to consider all pertinent matters before the annual meeting.