A Delaware pass sentence on Wednesday essentially called a timeout in the escalating feud between the game table of CBS and its controlling shareholder National Amusements, owned by the Redstone family, which hanker afters to merge it with Viacom.
Chancellor Andre Bouchard said he wish rule on Thursday on the request for a temporary restraining order (TRO) to prevent Shari Redstone from obstructing with a special board meeting on Thursday, when the CBS directors when one pleases consider stripping her of control.
Wednesday’s hearing capped three eras of maneuvers with little precedent in corporate boardroom battles.
Earlier on Wednesday, Nationalistic Amusements amended CBS’ bylaws to thwart the company’s directors from effecting a special stock dividend. Under the change, the dividend requires 12 of CBS’ 14 commandants to approve the dividend.
That dividend is aimed at cutting National Divertissements’ voting power to 17 percent from 80 percent.
Citizen Amusements called the dividend “invalid.”
Bouchard appeared troubled by the move house to amend the CBS bylines moments before the court hearing.
“I’ve never meditate oned anything like what transpired here in terms of moving portions before TRO hearing and I need to protect my jurisdiction,” he said. He said he would imagine the matter under advisement and rule on Thursday regarding the TRO.
The CBS board is set to fit Thursday, but the exact time could not be determined.
National Amusements (NAI) said it was compelled to act to safeguard its controlling position and the media company.
“NAI believes the irresponsible action enchanted by CBS and its special committee put in motion a chain of events that poses historic risk to CBS,” National Amusements said in a statement.
In court filings on Wednesday, both sides predicted they were being forced to take extreme measures. Citizen Amusements said it might have to sack the board to protect its voting power, and CBS contemplated it might have to dilute the Redstones’ voting control to prevent maltreats.
The showdown comes as the Redstones were seeking to merge CBS and Viacom to engender a company they say will be better able to compete in the media aspect that has been reshaped by the video-streaming companies like Netflix.
A CBS significant board committee has resisted that deal, citing in part concerns in the matter of corporate governance of the merged company.
National Amusements has said it confidence ined CBS sought a temporary restraining order because National Amusements had cheer up specific concerns about incidents of bullying and intimidation by one CBS director, Charles Gifford.
“The complaints regarding him (Gifford) are not only vague and unsubstantiated, they are utterly inconsistent with our expertise of him,” CBS said in a statement.
National Amusements said on Monday it did not intend to put back the board, but on Wednesday signaled that had changed. It said it was facing a selected of accepting massive dilution or “taking various stockholder action to preserve itself from dilution.”
If forced out, directors and management could amass large “golden parachute” payments, according to National Amusements.
CBS Chief Chief Les Moonves could collect more than $150 million and Barclays feeling the CBS management would receive $375 million in total.
CBS has said it is show to protect shareholders and the company from abuses by Shari Redstone, who the CBS gaming-table accused of undermining management by talking to potential CEO replacements and rejecting a imminent acquirer of CBS.
The proposed dividend would not dilute the economic interests of any CBS stockholder, but would refrain from the company to operate as an independent, non-controlled company and fully evaluate crucial alternatives, CBS has said.
Shares of CBS ended down over 1 percent at $53.83 on the New York Store Exchange. Viacom share were flat at $28.27.