CBS's Temporary Restraining Order Against Redstone Denied

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Chancellor Andre Bouchard granted CBS a temporary restraining order prohibiting National Amusements Inc. from taking any action to thwart a scheduled Thursday board vote on a dividend that would dilute National Amusement's preferred stock voting power from 80 percent to 17 percent, effectively giving CBS independence. Shares in Viacom were little changed on Thursday at $28.25.

"We are pleased by the court's decision to deny CBS and its special committee's unprecedented motion to try to deprive a shareholder of its fundamental voting rights", the company said in a statement.

"The court's ruling today represents a vindication of National Amusements' right to protect its interests", the company said in a statement. "National Amusements yesterday exercised its legal right to amend the company's bylaws to require a supermajority vote on certain board actions with respect to dividends, effective immediately". Meanwhile, CBS accused Redstone of eschewing a third-party offer for the company and refusing to submit the suggested deal with Viacom to a stockholder vote.

"While we are disappointed that the judge did not grant a (restraining order), the ruling clearly recognizes that we may bring further legal action to challenge any actions by NAI that we consider to be unlawful, and we will do so", CBS said.

Rallying this week as the company sought to assert its independence over its controlling shareholder, CBS' stock tumbled back to earth today after a DE judge denied the company's legal moves and the board is set to vote on a dilution measure that now is largely symbolic. LSV Asset Management's holdings in CBS were worth $19,702,000 as of its most recent SEC filing.

But Redstone's camp says she has no intent to "force" a merger. She's urged the two companies' boards to consider the merits of welding them back together.

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Greenfield remarked that Moonves "wants to be an owner, not an he should go start a company he owns". NAI contends the companies' board committees had reached a provisional agreement on economic terms of the proposed merger. "The path each company took could have been different under different leadership and this is why a combination should be explored now".

The gambit would have diluted National Amusements' controlling stake, and let CBS block a merger with Viacom, whose share price has been in steady decline over the last few months. Today (5/17), he determined that CBS would not face irreparable harm without a restraining order as it has other ways to pursue a legal challenge to NAI should Ms. Redstone improperly remove CBS directors - something CBS greatly fears will occur. The media titan can not speak, and his daughter has taken control over the company holdings - and driven the move to merge CBS and Viacom.

Shares of CBS fell 6 percent on news of the judge's ruling, while shares of Viacom were down 0.8 percent.

The bylaw change came just an hour before the hearing in DE to consider CBS' request for a temporary restraining order against the Redstones - a move that seemed to startle even the judge overseeing the case. By joining hands, the companies may be better able to stand up to TV insurgents like Netflix (NFLX). Viacom has suffered more than most given its reliance on young viewers, and its stumbles developing hit shows.

The case is captioned CBS v.