On Monday, CBS Corp. made waves with the filing of a lawsuit in Delaware by the company and its Special Committee of its Board of Directors alleging breaches of fiduciary duty by National Amusements Inc. — the Shari Redstone-controlled entity that controls CBS and Viacom and wants the companies to recombine.
To thwart such an effort, a vote on a special dividend severely diluting Redstone’s voting power has been set by CBS.
Today (5/16), National Amusements responded by saying proposed CBS dividend, which would slash the voting power of Ms. Redstone, would be invalid.
As such, NAI issued an amendment to CBS Corp.’s bylaws on Wednesday — a move that would negate any attempts to weaken Redstone’s influence.
This change to the bylaws would require a supermajority of board members to approve actions such as dividends and amendments to bylaws, The Wall Street Journal reports.
The effort to dilute National Amusements’ voting power is structured as a stock dividend, the newspaper reports.
Citing unnamed sources, the Journal notes that the supermajority requires 90% of CBS’s 14 board members to approve such a change.
Two Redstone family attorneys are on the Board. Thus, 90% would likely not be met.
With both parties duking it out, Viacom’s Class B shares fell 2 cents to $28.27, while CBS Corp. stock was down 59 cents to $53.83.