LOS ANGELES _ CBS Corp. essentially declared war on Shari Redstone on Monday, filing a lawsuit intended to thwart her effort to push through a merger of CBS and Viacom Inc.
The company is seeking a temporary restraining order to prevent Redstone and National Amusements Inc. _ the Redstone family investment vehicle that is the controlling stockholder of both CBS and Viacom _ from trying to change CBS' board members or governance documents before the board can meet Thursday and work to dilute the Redstones' control over the company.
Redstone wants the two companies to combine, and this is the second time in two years that she has tried to make a merger happen. She says the two companies would be stronger together as traditional media companies gird for battle with such technology companies as Facebook, Google, Netflix and Amazon.com.
CBS does not want to be weighed down by Viacom's struggling cable channels.
During the CBS board meeting Thursday, the directors will consider a dividend of Class A shares to Class B shareholders that would dilute National Amusements' voting interest from about 80 percent to 17 percent.
"Ms. Redstone, through her recently-obtained domination and control of NAI (National Amusements Inc.), has taken actions over the past two years that have led the Special Committee to conclude that she presents a significant threat of irreparable and irreversible harm to the Company and its stockholders," Monday's lawsuit says.
Redstone has said that she would like CBS Chief Executive Leslie Moonves to serve as chief executive of the combined company for at least two years. A sticking point in merger talks is what role her handpicked lieutenant _ Viacom CEO Bob Bakish _ would play.
