Today CBS announced that they plan to challenge amendments to their bylaws made the Redstone family. These changes would prevent the CBS board from diluting the Redstone’ stake in the company.
According to CBS the Redstone family who controls 79% of CBS voting stock delivered to CBS documents that stated they had amended the CBS bylaws to block CBS’s board’s ability to dilute the Redstones voting power. These new bylaws would restrict the board’s ability to declare stock dividends and change the vote required to change bylaws. This comes a week after CBS sued the Redstone family to block a Viacom merger and announced that they planned to dilute the Redstones control.
“The Company intends to challenge the Purported Bylaw Amendments,” CBS said in their filing. “The Company believes the Purported Bylaw Amendments are invalid under Delaware law and the Purported Bylaw Amendments cannot become effective under controlling federal law and SEC rules until 20 days after the Information Statement is distributed to stockholders even if they were valid,” CBS said in its filing.
The Redstone owns a controlling stake in both CBS and Viacom and are reportedly pushing to once again merge the two companies into one. The CBS board of directors had decided they do not want to merge with Viacom and are pulling every trick they have to block the merger. The question is can a publicly traded company successfully go against the wishes of their majority shareholder. We will likely have to wait for the courts to decide who will win this fight.
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